Stocks opened in a very tight mix Wednesday, with all eyes trained on the afternoon's policy announcement from the Federal Reserve.
X The Dow Jones industrial average and the S&P 500 opened a few clicks higher, up less than 0.1%, while the Nasdaq Composite eased almost 0.1%.
Stocks in Europe also held to a tightly mixed formation in afternoon trade, while the leading Asian stock markets had closed firmly higher in their Wednesday sessions.
The National Association of Realtors reports its August existing home sales numbers at 10 a.m., an important follow-up to Tuesday's housing starts data. But the spotlight economic news is scheduled for 2 p.m. ET, when the Federal Reserve announces any policy changes from its two-day meeting. A press conference with Fed Chair Janet Yellen follows at 2:30 p.m. ET.
After months of well-telegraphed intentions, the Fed is today expected to announce a gradual shift from the neutral stance of holding bonds to being a seller as it begins to trim $4.5 trillion in debt from its balance sheet. The move points to declining bond prices and rising yields which, in turn, should drive up interest rates across the economy.
The expectations have been a positive for banks and other credit and financial institutions, the leading beneficiaries of rising interest rates. All seven of the banking industry groups tracked by IBD turned from declines to solid gains over the past four weeks. The Midwest banks group led, with a 4% gain, followed by foreign banks, up 3.6%, and West/Southwest banks, up 3.5%.
Building products, oil and gas, and heavy construction industry groups have posted the strongest gains over the past four weeks among the 197 industry groups tracked by IBD.
Pfizer Gets Upgrade, Chinalco Spikes; FedEx, Adobe Take Hits
Pfizer (PFE) surged to the top of the Dow, up 1.7% after an upgrade to overweight, from equal weight, from Piper Jaffray. Pfizer remains in a buy range, above a 34.58 buy point in a two-month flat base. Johnson & JohnsonJNJ and 3M (MMM) each dropped 1.2%, the Dow's worst early declines. 3M receoved a downgrade to underweight from neutral by JPMorgan. Johnson & Johnson was cut to sell, from neutral, by Goldman Sachs.
Apple (AAPL) dropped 0.7% while, among the FANG stocks,Google parent AlphabetGOOGL led with a 0.6% gain.
Netflix (NFLX) and Amazon.com (AMZN) each rose 0.4%. A Piper Jaffray report based on Google search data suggested Netflix could easily surpass its subscriber growth targets when it reports third-quarter earnings in October. Netflix, an IBD Leaderboard stock, is climbing the right side of a flat base with a 191.60 buy point.
Amazon was reported to be working on its first Alexa-powered smart glasses device. The wearable computer would rely on a bone-conduction systems, avoiding the need for speakers or headphones, the Financial Times reported. Also an IBD Leaderboard stock, Amazon is in a flat base with a 1083.41 buy point.
Important earnings results reported late Tuesday included Adobe Systems (ADBE), FedEx (FDX) and Bed, Bath & Beyond (BBBY).
Adobe dropped 5%, despite beating fiscal third-quarter sales and earnings expectations. Management's fourth-quarter guidance was mixed, however. The IBD 50 stock has been extended, trading near new highs and well above its 10-week line of support.
FedEx dipped 0.4% after a cyberattack and Hurricane Harvey chewed into its fiscal first-quarter results. Shares have been holding above 10-week support, in a two-month flat base.
Bed, Bath & Beyond was all wet, diving 15% after reporting a harsh miss of earnings, revenue and same-store sales targets in its second-quarter results. The stock ended Tuesday down 6% so far for the week, and 66% below its January 2015 high.
The Aluminum Corp. of China (ACH), commonly called Chinalco, roared ahead 10% to seize a new high. Aluminum prices in China spiked to a six-year high following news that Chinalco and a leading competitor had pared back production well ahead of winter restrictions normally imposed by the Chinese government. Chinalco shares are up 73% since clearing a double-bottom base in July.
U.S. aluminum producer Alcoa (AA) rose 2%. Its shares are up 25% since clearing a 37.71 cup-with-handle buy point in August.
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