Stocks ended mixed Wednesday as a post-Fed rally fizzled. Stocks had opened higher as investors cheered some encouraging readings on the economy, then swung in about a 50 point range after the Fed's statement, before finishing narrowly mixed.
The Dow Jones Industrial Average gained 30.23, or 0.3 percent, to close at 9,802.14, after being up more than 130 points earlier. The S&P 500 rose 0.1 percent, while the Nasdaq shed about 0.1 percent.
The Fed left interest rates unchanged, as expected, and, theyleft the "extended period" language in their statement
— as in economic conditions "warrant exceptionally low levels of the federal funds rate for an extended period."
The European Central Bank and Bank of England will issue statements tomorrow and investors will be closely watching for any signs of a shift in monetary policy. Central banks in Australia and Norway have already started to raise rates and some say the ECB may also raise rates soon.
Nearly two-thirds of Dow components finished higher: Merck, McDonald's and Microsoft led the pack. Kraft and DuPont were the biggest decliners.
Health-care stocks rose after election day amid speculation that several key Republican wins may slow down health-care reform. Plus, Merck got a boost after its research chief said there may be more mergers ahead now that its acquisition of Schering-Plough is complete.
And Wellcare Health Plans beat earnings expectations even as membership declined.
Garmin was the biggest percentage decliner on the Nasdaq as the GPS maker beat earnings expectations but revenue dropped 10 percent and investors remained worried about competition from the Google navigation application on the Droid phone, which hits store shelves on Friday. Palm also fell sharply.
Intel was under the microscope after the Wall Street Journal reported that New York Attorney General Andrew Cuomo has filed antitrust charges, alleging that the chip giant threatened computer makers and paid them huge sums of money to get them to stop using rival chips. Its shares rose 1.3 percent.
Microsoft gained 2 percent after the software giant announced more layoffs.
Gold hit yet another record this morning — this time it topped $1,093 a troy ounce — before settling at $1086.70 a barrel. Oil advanced, settling at $80.40 a barreland the dollar fell.
The ISM reported its gauge of the services sector dropped to 50.6 in October from 50.9 in September. The fact that it came in above 50 means the sector remains in expansion mode but it fell short of the 51.5 reading economists surveyed by Reuters had expected.
Payroll-services firm ADP reported that fewer jobs were lost in October than in previous months and outsourcing-consulting firm Challenger, Gray & Christmas reported planned layoffs hit a 19-month low.
The reports are widely seen as a precursor to the government's October jobs report, due out on Friday. Economists expect to see 175,000 jobs were shed from nonfarm payrolls, fewer than in previous months.
Earlier, the Mortgage Bankers Association said applications for home loans increasedafter interest rates slipped below 5 percent.
Among the notable commentary this morning: Banking analyst Meredith Whitney said "normalized" earnings for banks is a fallacy — with consumers struggling and dramatic regulatory change, earnings will be negatively impacted for a protracted period.
And Nouriel Roubini, the economist often referred to as "Dr. Doom," elaborated on his "mother of all carry trades" theory, saying if the Fed keeps interest rates low, therefore weakening the dollar, it will prolong the carry tradeand make the unwind all the more painful.
In the morning's earnings news, Kraft and Comcast beat estimates, and Time Warner raised its outlook.
After the bell, we'll get reports from Dow component Cisco Systems, News Corp., and Qualcomm.
Oracle and Sun Microsystems skidded as the Financial Times reports that the European Union is close to formally objecting to Oracle's $7.4 billion takeover of Sun on antitrust grounds — which could be a step on the way to blocking the deal.
Auto industry news: Nissan is changing its annual loss forecast to a profit, Toyota is bailing out of Formula One racing because of the weak economy, and General Motorshas decided to keep its EuropeanOpel unit rather than selling it.
Still to Come:
WEDNESDAY: Earnings from Cisco, News Corp., Prudential and Qualcomm after the bell
THURSDAY: Retailers report October sales; BOE, ECB statements; weekly jobless claims; Earnings from Toyota, CVS, Sirius, Unilever, CBS, Nvidia and Starbucks
FRIDAY: October jobs report; Geithner speaks; Droid phone launches; wholesale trade; consumer credit; Fed's Duke speaks
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