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Stock Market News For Feb 21, 2019

Markets posted moderate gains on Wednesday after the release of the minutes from Fed’s last meeting held in January. The Fed remined undecided on the future of rate hikes in the country. However, the minutes indicated that Fed’s balance sheet unwinding might end by the end of this year. All of the three major benchmarks closed in the green. Meanwhile, trade talks between the United States and China continued in Washington.

The Dow Jones Industrial Average (DJI) increased 0.2%, to close at 25,954.44. The S&P 500 increased 0.2% to close at 2,784.70. The tech-laden Nasdaq Composite Index closed at 7,489.07, gaining 0.03%. The fear-gauge CBOE Volatility Index (VIX) decreased 5.5% to close at 14.06. Advancers outnumbered decliners on the NYSE by a 1.61-to-1 ratio. On Nasdaq, a 1.33-to-1 ratio favored advancing issues.

How Did the Benchmarks Perform?

The Dow gained 63.1 points to end the session in the positive territory. Gains for the Dow were buoyed by a surge in the shares of Boeing BA and Caterpillar CAT, which gained 1.3% and 3.3%, respectively.

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The S&P 500 added 4.9 points to also end in the green. Of the 11 major sectors of the S&P 500, seven ended in the positive territory, with materials and financials leading the advancers. The Materials Select Sector SPDR ETF (XLB) and the Financial Select Sector SPDR ETF (XLF) gained 1.7% and 0.7%, respectively.

Meanwhile, the Nasdaq gained 2.3 points to also end in the green. Gains for the tech-laden index were buoyed by a 0.6% bump in the shares of Apple AAPL. Nasdaq matched its eight-day streak of gains that it had achieved in August last year. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Fed Remains Undecided on Future of Rate Hikes

The much-awaited minutes from Federal Open Market Committee’s meeting held in January were released on Wednesday. Minutes showed that officials from the Fed remained divided on their view about hiking interest rates. A group of officials argued that a hike in interest rates would only be necessary if inflation levels turned out to be higher than the initial baseline forecast.

On the other hand, another faction opined that raising rates would become necessary if the U.S. economy advanced per the expectations. However, the members stated that holding the rates steady in the range of 2.25% to 2.5% "posed few risks at this point."

Meanwhile, “almost all” the Fed officials stated that they wanted to finish unwinding the humongous $3.8 trillion balance sheet by the end of 2019. They also expressed desires to reinvest the mortgage-backed securities into Treasurys after successfully finishing the balance sheet unwinding.

Trump Warns About Auto Tariffs on Europe

In a meeting on Wednesday with Austrian chancellor Sebastian Kurz, President Trump announced that the United States might consider imposing automobile tariffs on Europe if a trade deal isn’t reached between America and Europe. Trump also stated that Europe is “very tough to make a deal with.”

U.S.- China Trade Talks Continue

The latest round of trade negotiations between the United States and China ended on Friday. The Asian giant is planning to increase its semiconductor purchase from the United States to a total of $200 billion over the next six years. Meanwhile, talks between the two countries have resumed this week in Washington.

Such developments boosted market sentiment as market watchers speculated that both the parties were eager to reach a deal before the March 1 deadline. Trump had tweeted over the weekend that “Big progress being made on soooo many different fronts!”

Stocks That Made Headlines

TechnipFMC Posts Q4 Loss on Impairment Cost, Cuts Capex

TechnipFMC plc FTI came up with unsatisfactory quarterly results on Feb 20, hit by massive impairment and accounting charges, leaving investors disappointed. (Read More)

Southwest Shares Decline on Dull Q1 Unit Revenue View

Southwest Airlines Co. LUV has provided a bearish outlook on revenues and operating revenue per available seat mile (RASM: a key measure of unit revenues) for the first quarter of 2019 following the recent U.S. government shutdown. (Read More)

Boston Beer's Earnings & Revenues Top Estimates in Q4

The Boston Beer Company, Inc. SAM reported impressive fourth-quarter 2018 results, wherein earnings and revenues outpaced the Zacks Consensus Estimate. (Read More)

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Southwest Airlines Co. (LUV) : Free Stock Analysis Report
 
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