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US Stock Indexes Finish Flat To Unchanged On Fed’s Dovishiness

Posted by: : Paul EbelingPosted on: February 18, 2015 US Stock Indexes Finish Flat To Unchanged On Fed's Dovishiness

US Stock Indexes Finish Flat To Unchanged On Fed’s Dovishiness

$BA, $UAL, $GE, $DE, $FOCL

DJIA -17.73 at 18029.85, NAS 100 +7.10 at 4906.36, S&P 500 -0.66 at 2099.68

Volume: trade was well below average with just 716-M/shares changing hands on the NYSE.

The US major stock market averages finished Wednesday flat to unchanged. The S&P 500 ended unchanged, the NAS 100 added 0.1%.

The market largely ignored he FOMC minutes, even though they revealed the likelihood that the Fed will not be raising rates any time soon due to several risks including declining inflation and weak global growth, that means that the dovishness is priced in.

The Treasury market heard the message loud and clear, responding with a rally. The 10-yr T-Note reclaimed about 50% of Tuesday’s decline with the benchmark yield dropping 6 bpts to 2.08%.

The US Dollar surrendered its intra-day gain following the minutes.

European Central Bank (ECB) will extend Greece’s Emergency Liquidity Assistance allowance by EUR3.50-B to EUR68.50-B for 2 wks. However, that may not be enough next week when Greece’s government runs out of cash. German ECB members have recently opposed using ELA funds to finance governments, which may explain the limited scope of the increase.

Greece’s government spokesperson said the government plans to request an extension to the current loan agreement. Germany has opposed granting unconditional extensions so it remains to be seen whether the request is granted.

6 of 10 stock  sectors posted gains, but just 3, the industrials (+0.6%), consumer staples (+0.6%), and utilities (+2.4%)—added more than 0.3%.

The financials (-0.6%) surrendered their gain from Tuesday, the energy stock sector (-1.2%) contributed to the early weakness.

The energy stock sector weighed as Crude Oil returned to Tuesday’s intra-day low, falling 2.7% to 52.12 bbl.

The cyclical stock sectors, industrials rallied behind heavyweights  Boeing (NYSE:BA) 151.17, +1.25, General Electric (NYSE:GE) 25.25, +0.08, and Deere (NYSE:DE) 92.75, +2.83 with shares of DE getting a boost after it was reported Warren Buffett’s Berkshire Hathaway invested in the company during Q-4.

Transport stocks also contributed to the strength of the industrial sector with the Dow Jones Transportation Average adding 0.4%.

Airlines led the way thanks to lower oil prices with United Continental (NYSE:UAL) 66.72, +1.79 rising 2.8%.

The consumer discretionary stock sector (-0.1%) was pressured early by apparel retailers after Fossil (NASDAQ:FOSL) 83.69, -15.63 disappointed with its earnings/guidance and discussed currency headwinds, a concern that could be echoed by its peers in the weeks ahead.

Stay tuned…


Paul Ebeling

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Paul Ebeling

Pattern Recognition Analyst, equities, commodities, forex
Paul Ebeling is best known for his work as writer and publisher of “The Red Roadmaster’s Technical Report” on the US Major Market Indices™, a highly-regarded, weekly financial market letter, where he enjoys an international audience among opinion makers, business leaders, and respected organizations. Something of a pioneer in online stock market and commodities discussion and analysis, Ebeling has been online since 1994. He has studied and worked in the global financial and stock markets since 1984.

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