(For a live blog on the U.S. stock market, click LIVE/ or
type LIVE/ in a news window.)
* Fed cuts rates by 25 basis points
* GE gains on profit beat, cash flow forecast
* U.S. GDP growth slows less than expected in Q3
* Dow up 0.43%, S&P 500 up 0.33%, Nasdaq up 0.33%
(Updates with market close)
By Chuck Mikolajczak
NEW YORK, Oct 30 (Reuters) - U.S. stocks advanced on
Wednesday, with the S&P 500 closing at a record for the second
time in three sessions, after a policy statement by the U.S.
Federal Reserve that cut interest rates by a quarter of a
percentage point.
The Fed lowered its policy rate to a target range between
1.50% and 1.75%, but dropped a previous reference in its
statement to "act as appropriate" to sustain the economic
expansion, which could signal the Fed may hold off on future
rate cuts.
Chair Powell said "we believe that monetary policy is in a
good place," in a press conference following the announcement,
indicating the central bank was likely to keep rates on hold
absent a major change in the economic outlook, helping stocks
move higher in the latter stages of trading. "The only concern in this market was that they'd make some
statement saying this is it," said Rick Meckler, partner at
Cherry Lane Investments, New Vernon, New Jersey. "They said they
remain open to what the data shows them. Flexibility is what the
market wants to see."
Hopes of a rate cut and recent optimism around the trade
talks had helped lift the benchmark S&P 500 to record intraday
highs for three straight sessions.
The Dow Jones Industrial Average .DJI rose 115.54 points,
or 0.43%, to 27,186.96, the S&P 500 .SPX gained 9.92 points,
or 0.33%, to 3,046.81 and the Nasdaq Composite .IXIC added
27.12 points, or 0.33%, to 8,303.98.
The interest-rate sensitive banking sub-sector .SPXBK
pared losses after the statement, but was still down 0.69%.
Utilities .SPLRCU , up 0.86%, was the best performing while the
energy sector .SPNY lagged, down 2.12%.
Investors also dealt with the latest round of corporate
earnings. Shares of General Electric Co GE.N jumped 11.47%
after the industrial conglomerate beat quarterly profit
estimates and raised its cash forecast for the year.
Yum Brands Inc YUM.N shed 6.22% and was among the top
decliners on the benchmark index as the KFC owner missed
quarterly profit expectations.
U.S. economic growth slowed less than expected in the third
quarter, a Commerce Department report showed, as declining
business investment was offset by resilient consumer spending
and a rebound in exports, further allaying financial market
fears of a recession. Other data showed a modest acceleration in private sector
job growth, boosted by gains in the service sector, according to
the ADP National Employment Report. The data comes ahead of
Friday's payrolls report.
About 74.1% of the 278 S&P 500 companies that have reported
so far have beaten profit estimates, according to Refinitiv
data.
However, profit growth forecasts for the next four quarters
have been revised lower, even as expectations for the decline in
third quarter earnings has shrunk to 1.6%, compared with a 2.2%
fall at the start of the month.
Buoying the Dow was a 2.88% rise in shares of Johnson &
Johnson JNJ.N . The company said 15 new tests found no asbestos
in a bottle of baby powder that the U.S. Food and Drug
Administration says tested positive for trace amounts of
asbestos. The FDA said it stands by its finding. Mattel Inc MAT.O surged nearly 13.78% after the U.S.
toymaker reported a surprise jump in quarterly revenue.
Advancing issues outnumbered declining ones on the NYSE by a
1.15-to-1 ratio; on Nasdaq, a 1.01-to-1 ratio favored decliners.
The S&P 500 posted 21 new 52-week highs and 4 new lows; the
Nasdaq Composite recorded 67 new highs and 72 new lows.
The S&P 500 and Fed interest rate decisions https://tmsnrt.rs/2oA9uII
^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^>