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Stocks slip after Fed cuts interest rates



The U.S. slipped Wednesday afternoon after the Federal Reserve cut interest rates by a quarter of a percentage point as expected to dampen the economy from a global slump and escalating trade policy tensions.

The Fed also announced that it would end runoff of its $ 3.8 trillion portfolio two months earlier than previously planned.

The government statement released after Wednesday's meeting left the door for the Fed to cut interest rates again in the months ahead.

How are the most important benchmarks going?

Dow Jones Industrial Average

DJIA, -0.51

%

dropped by 77 points or 0.3%, to 27,125 and S&P 500

SPX, -0.47%

tossed about 8 points, or 0.3% to 3.006. Meanwhile Nasdaq Composite

COMP, -0.36%

lost 12 points, or 8% to 8,265.

On Tuesday, Dow dropped 23.33 points, or 0.1%, to 27198.02, while the S&P 500 index fell 7.79 points, or 0.3%, to 3,013.18, and the Nasdaq Composite Index drew 19.71 points to 8,273.61, down 0.2%.

So far this month, Dow has climbed 2.3%, the S&P 500 has advanced 2.4%, while Nasdaq has returned 2.2%.

What is driving the market?

Iinvestors were largely expecting a 0.25% cut in the federal fund rate, and some were disappointed that the Fed did not lower interest rates by more than a quarter, or clearly signaled that further interest rate cuts were coming. Investors will gain more clarity on the path for future policy during a press conference with Federal Reserve Chairman Jerome Powell, which will begin at 2:30 p.m. Eastern Time.

Apple

AAPL, + 3.36%

shares traded at the highest level in nine months on Wednesday after the technology giant withdrew from a slide in iPhone sales and reported better-than-expected earnings in the second quarter and a robust outlook for the last months of the fiscal year, although analysts noted that a large share buyback program helps support the valuation.

GE, + 0.86%

slipped despite beating revenue estimates and raising the outlook for the entire year.

Nearly 60% of S&P 500 companies have reported second quarter earnings so far, and 76% have reported stronger quarterly results than expected, according to FactSet.

As Goldman Sachs noted, for the first time since the financial crisis, the acquisition of businesses is over free cash flow. Total repurchases among all companies this year increased by 26% through mid-July.

Read: How the stock market tends to work when the Fed cuts interest rates

When it comes to US economic data, an estimate of private sector job growth from payroll company ADP and Moody's Analytics 156,000 new jobs added in July, roughly in line with the 155,000 projected by economists, according to Econoday.

US and Chinese delegates overnight, including Secretary of Commerce Robert Lighthizer and Finance Minister Steven Mnuchin, completed the first round of talks since the G-20 meeting in May without any significant development on the customs front, according to reports.

However, the White House characterized the talks as "constructive," saying "the Chinese side reaffirmed their commitment to increase US agricultural exports," according to a statement, with talks scheduled to continue in Washington in early September.

Read: Trump says he wants more than "low" Fed interest rate cuts

Which stocks are in focus?

Apple Inc .

AAPL, + 3.36%

share rose 4.5% after the iPhone manufacturer and the Dow component late Tuesday reported revenue growth in the second quarter than expected. The decline in iPhone sales over the last couple of years has limited Apple's overall growth since the fiscal year ended September 30, 2015, but the large buy-back program has helped sustain EPS growth and shares have almost doubled over the past three years.

Shares of General Electric Co .

GE, + 0.86%

slipped after the industrial conglomerate reported adjusted profits and revenues in the second quarter that exceeded expectations and lifted its outlook for the full year. GE said the loss was linked to NOK 1 per share, or NOK 3 per share when considering continued operations. On an adjusted basis, however, GE earned 17 per share, a figure that compares with last year's 8 percent profit. Revenue fell 4.3% from last year to $ 28.8 billion.

Shares of Micro Devices Inc.

AMD, -9.36%

fell after projecting weaker-than-expected revenue growth for its current quarter late Tuesday.

Shares of Humana Inc .

HUM, + 4.71%

rose after the health care system r exported surpluses and revenues in the second quarter that exceeded expectations, providing good full-year guidance.

Molson Coors Brewing Co. .

TAP, -6.73%

stock fell 7.5% after the beer supplier reported sales and profits in the second quarter that fell below expectations.

Shares of Electronic Arts. Inc. . gathered after the video game maker beat sales expectations and recognized a $ 1.7 billion tax advantage on paper.

Check out : How can the Fed shake the market instead of calming it down

How did other markets trade?

Tax capital rates dropped to session levels after the Federal Reserve lowered interest rates for the first time since the financial crisis. The return on the 10-year US Treasury

TMUBMUSD10Y, -1.14%

was around 2.04% following the Fed's decision.

See: How the Fed could throw a nasty curve ball on bond market cars with a "hawkish cut"

Gold futures ended at a loss on Wednesday, then extended the decline after the US Federal Reserve cuts policy rates by a quarter points, as expected. Gold prices

GCZ19, -0.17%

had settled $ 4, or 0.3%, to $ 1,437.80 on Comex, ahead of Fed news.

In commodity markets, the price of crude oil was

CLU19, + 0.93%

rose 0.4% to almost just above $ 58.26 a barrel on the New York Mercantile Exchange, after US government data showed that domestic commodity stocks fell for a seventh week in a row, the longest decline in one and a half years.

Read: Oil bulls look at Fed interest rate cuts to overcome demand concerns

See also: History suggests gold vulnerable to & # 39; sell-the-fact & # 39 ; reaction if the Fed delivers interest rate cuts [19659002] the US dollar index

DXY, + 0.23%

was little changed at 98.24, near the highest level since May.

Check out: Markets warn that 'monetary policy will not work,' says BofA Merrill Lynch

In Asia night to Monday, China's CSI 300 index

000300, -0.90%

index drops 0.9%, Japan's Nikkei 225

NIK, -0.86%

lost 0.9% and Hong Kong's Hang Seng

HSI, -1.31%

drops 1.3%. In Europe, equities were 0.1% lower, as measured by the Stoxx Europe 600 index

SXXP, + 0.17% .


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