The major averages were range-bound in morning trading ahead of the afternoon's central bank announcement. The Federal Reserve, as nearly universally expected, lowered its benchmark rate by a quarter point. Now that the Fed is out of the way, investor attention will turn back to earnings, with Apple (AAPL) and Facebook (FB) headlining another busy night for corporate reports.
ECONOMIC EVENTS: In the U.S., the first reading of third quarter gross domestic product showed that growth slowed to a 1.9% pace in Q3, though that was well above the consensus estimate of 1.6% and almost matched the previous quarter's 2.0% growth rate. ADP reported private payrolls increased 125,000 in October, which was a little better than expected, but last month’s figure was revised downwards, confirming a slowing rate of job additions.
CNBC reported that Chile has called off next month's Asia Pacific Economic Cooperation summit in Santiago. U.S. President Donald Trump and Chinese leader Xi Jinping were scheduled to meet at the summit to discuss "Phase One" of their trade deal.
The Federal Reserve lowered the policy band to 1.50% to 1.75% in a third straight quarter point reduction. The big change in the statement was the removal of "act as appropriate," as the Fed now says it will "assess realized and expected economic conditions relative to its maximum employment objective and its symmetric 2% inflation target" as it determines the timing and size of future adjustments. The Fed added in today's statement that the labor market remains strong, with economic activity rising moderately. Of note, two Fed members, Esther George and Eric Rosengren, voted against the rate cut.
TOP NEWS: General Electric (GE) shares rose 11.8% after the company beat third quarter earnings expectations and raised its 2019 cash flow forecast.
Shares of Mattel (MAT) were 13.8% higher after the toymaker reported third quarter results, said a probe determined the company has certain material weaknesses, announced that its CFO will be leaving the company and issued fiscal year guidance.
Piper Jaffray analyst Harsh Kumar raised his price target for AMD (AMD) to $35, saying the company largely met September quarter estimates and "barely missed" December quarter revenue guidance. Loop Capital analyst Cody Acree upgraded AMD to Buy from Hold with a price target of $41, up from $32, despite his contention that the company's Q3 results were in-line and "unlikely" to get investors overly excited.
Anixter (AXE) agreed with an affiliate of Clayton, Dubilier & Rice to be acquired in an all cash transaction valued at approximately $3.8B.
In other M&A news, the Wall Street Journal reported that Fiat Chrysler (FCAU) and Peugeot owner PSA (PUGOY) have agreed to merge. PSA's board has approved the deal, and an official announcement on the matter is expected Thursday, according to the Journal.
MAJOR MOVERS: Among the noteworthy gainers was Green Dot (GDOT), which rose 15.1% after the company extended its relationship with Walmart (WMT) and announced that the two would form a fintech accelerator. In addition, Green Dot will issue Walmart 975,000 restricted shares as part of the agreements. Also higher were OneSpan (OSPN) and Tenable Holdings (TENB), which gained a respective 22.7% and 16.1% after reporting quarterly results.
Among the notable losers was Molina Healthcare (MOH), which fell fractionally following news that the Texas Health and Human Services Commission has awarded some of its Medicaid services contracts for certain service areas to other providers. Also lower after reporting quarterly results were Yum Brands (YUM) and Tupperware (TUP), which fell 5.7% and 34.6%, respectively.
INDEXES: The Dow rose 115.27, or 0.43%, to 27,186.69, the Nasdaq gained 27.12, or 0.33%, to 8,303.98, and the S&P 500 advanced 9.88, or 0.33%, to 3,046.77.
GE Aerospace
+1.08 (+11.95%)
Mattel
+1.43 (+13.52%)
AMD
+0.08 (+0.24%)
Anixter
+12.04 (+16.89%)
Ticker changed to STLA
+0.74 (+5.19%)
Ticker changed to STLA
+ (+0.00%)
Green Dot
+3.91 (+15.18%)
Walmart
+0.96 (+0.82%)
OneSpan
+3.56 (+22.49%)
Tenable Holdings
+3.63 (+16.23%)
Molina Healthcare
-0.795 (-0.64%)
Yum! Brands
-6.11 (-5.57%)
Tupperware Brands
-5.39 (-34.68%)