Stocks opened little changed but tacked on gains as the morning progressed. The move has been broad, as each of the major averages are higher by roughly 1% as investors appear optimistic about the prospects for dovish comments from the Fed accompanying the rate decision and perhaps a slowing of the rate increases that have been telegraphed over the past year. Oil prices are steady as the weekly DOE inventory report showed a lower draw down of supply than had been expected. Oil prices have rebounded more than 3% and are now trading back above $47 a barrel.
ECONOMIC EVENTS: In the U.S., the FOMC resumed its meeting and will announce its decision at 2:00 pm ET. It will also release its quarterly forecasts, including the dot plot. The current account gap widened to a bigger than expected to $124.8B in Q3, which was close to forecast. Existing home sales rose 1.9% to a 5.32M pace in November, beating forecasts.
COMPANY NEWS: GlaxoSmithKline (GSK) shares were 3% higher after it and Pfizer (PFE) announced that they have entered into an agreement to merge their consumer healthcare units into a joint venture, creating a single consumer healthcare company. Under the terms of the agreement, Pfizer will receive a 32% equity stake in the JV, entitling Pfizer to its pro rata share of the JV's earnings and dividends. The transaction is expected to deliver $650M in peak cost synergies and to be slightly accretive for Pfizer in each of the first three years after the close of the transaction, which is anticipated during the second half of 2019, the companies said.
In earnings news, shares of FedEx (FDX) slipped 9% after the company reported better than expected quarterly results but cut its guidance for fiscal 2019, citing European weakness. In addition, FedEx announced cost reduction actions that include a "voluntary buyout program for eligible employees, international network capacity reductions at FedEx Express, limited hiring in staff functions, and reductions in discretionary spending."
Also on the earnings front, Micron (MU) shares fell 3% after the company reported quarterly results, provided downbeat guidance for the second quarter, and cut its fiscal 2019 DRAM industry demand growth view to 16% from 20%.
Meanwhile, General Electric (GE) shares rose 7% after reports that the company has filed confidentially for an initial public offering of its healthcare unit. The IPO is expected to come around the middle of 2019, it has been reported.
MAJOR MOVERS: Among the noteworthy gainers was General Mills (GIS), which rose 7% after it reported better than expected quarterly earnings and maintained its guidance for fiscal 2019. Also higher after reporting quarterly results were Winnebago (WGO) and Jabil (JBL), which gained a respective 15x% and 8%.
Among the notable losers was FTS International (FTSI), which slid 13% after Credit Suisse analyst James Wicklund downgraded the stock to Neutral from Outperform. Also lower was Allergan (AGN), which fell 6.5% after the company announced it has suspended sales of textured breast implants in European markets.
INDEXES: Near midday, the Dow was up 237.39, or 1.0%, to 23,913.03, the Nasdaq was up 67.77, or 1.0%, to 6,851.68, and the S&P 500 was up 25.86, or 1.02%, to 2,572.02.