The stock market continued lower for much of the morning but rallied in the afternoon following a quarter-point rate cut from the Fed and remarks by central bank chief Jerome Powell. Tech giants Apple (AAPL) and Facebook (FB), part of the FAANG group, both eased as investors awaited earnings reports after the close.
XAfter an up-down trading session early in the stock market today, stocks drifted down, awaiting comments from Fed chief Jerome Powell on the outlook for Fed policy. Stocks had earlier trended lower after Chile canceled the APEC trade meeting where China and the U.S. were expected to seal a trade deal. A stronger-than-expected Q3 GDP growth rate of 1.9% also rattled some investors.
But in the end, remarks by the Fed's Powell that rate hikes were unlikely as long as inflation remained under control turned market sentiment sharply. The Dow Jones Industrial Average rose 0.4%, while the tech-heavy Nasdaq gained 0.3% and S&P 500 added 0.3%. The small-cap Russell 2000 Index narrowed early big losses to just down 0.3%.
Volume on major exchanges was up from the same time a day earlier. NYSE turnover trended 9% higher, while Nasdaq rose 4%.
With earnings looming, both Apple and Facebook fell. Apple, now extended over a flat base from a 221.47 buy point, finished basically unchanged and rose 0.7% after hours on an earnings beat.
Facebook, down more than 1% early, ended off just 0.6%. It was up 3.5% after hours, following an upside earnings and sales surprise. Facebook stock is in a consolidation pattern with a 208.76 buy point after a midsummer breakout from a cup-with-handle base fizzled. Facebook's last two quarterly earnings reports, showing 50% and 48% EPS declines, came despite solid revenue gains of 26% and 28%.
Other FAANG names were mixed. Amazon (AMZN), up 1%, added to a recent rally. Video streaming stock Netflix (NFLX) jumped 3.6%, recapturing its 50-day moving average after recently posting a Q3 EPS gain of 65%, well above Wall Street estimates. Alphabet's Google (GOOGL) finished flat after gapping up 2% on Monday above a 1,268.49 buy point out of a cup-with-handle base.
Among the IBD 50 list of top growth stocks, a number of winners emerged, especially business software.
Stock Market: Is Software Back?
Salesforce.com (CRM) tacked on 1.5%. After a hefty double-digit gain earlier in the year, Salesforce stock moved sideways and based a number of times. The maker of customer relations software is in a consolidation with a 167.66 buy point. With Wednesday's rise, Salesforce.com recaptured both its 50-day and 200-day moving averages for the first time in seven weeks.
Paylocity Holding (PCTY) added 2.1%. Paylocity, No. 1 in its industry with a 99 Composite Rating from IBD's Stock Checkup, mostly resisted the big recent sell-off of software names. Paylocity stock is consolidating below a 112.56 buy point, just 8% from it's all-time high.
Another big software name, Adobe Systems (ADBE) gained 2.6%. It rallied out of a flat base last summer, but didn't stay there. Recent rises in Adobe stock show the makings of a possible new base, possibly a rare but potent base-on-base pattern.
Former IBD 50 name Atlassian (TEAM) rose 4.2%, adding to an impressive five-day rally after selling off in mid-October on earnings. After slipping below its 200-day line in recent weeks, Atlassian has once again found support above it, and sits just below its 50-day line.
A handful of IBD Stocks on the Move stocks showed solid gains, among them electronics parts maker Inphi (IPHI), which surged 19.4%; OneMain Holdings (OMF), up 3% and on track for a four-day rally; and L3Harris Technologies (LHX), a major contractor for the coming F-35 stealth jet, up 2.4%.
Among exchange traded funds, Innovator IBD 50 ETF (FFTY), an index bellwether for IBD 50 growth stocks, edged 0.2% higher.
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