Stock Market News For July 28, 2016

Benchmarks closed mixed on Wednesday following the Federal Open Market Committee’s (FOMC) policy statement and key earnings results. The Fed kept key rates unchanged as expected, but hinted at a rate hike as early as September. Moreover, declines in Coca-Cola following revenue miss weighed on the S&P 500 and Dow. However, Apple registered best percentage gains in more than two years, on the back of better-than-expected earnings results. This in turn curbed some of the losses in the Dow and boosted the Nasdaq to end in the green.

For a look at the issues currently facing the markets, make sure to read today’s Ahead of Wall Street article.

The Dow Jones Industrial Average (DJI) decreased 1.58 points, to close at 18,472.17. The S&P 500 fell 0.1% to close at 2,166.58. However, the tech-laden Nasdaq Composite Index closed at 5,139.81, gaining 0.6%. The fear-gauge CBOE Volatility Index (VIX) decreased 1.7% to settle at 12.83. A total of around 7.3 billion shares were traded on Wednesday, higher than the last 20-session average of 6.4 billion shares. Decliners outpaced advancing stocks on the NYSE. For 52% stocks that declined, 45% advanced.

After the end of its two-day policy meeting yesterday, the Fed decided to keep its rates at the previous range of 0.25% to 0.5%. In its policy statement the FOMC said that labor market has “strengthened” and economic activity has been growing at a “moderate rate.” It also said that household spending has increased strongly and though has inflation remained unchanged in recent times, is expected to increase to 2% “over the medium term.” The FOMC statement indicated that encouraging economic scenario might result in a rate hike this year. With the fall in “near-term risks to the economic outlook,” rate hike as early as September might be possible.

Meanwhile, shares of Dow component Coca-Cola Company (NYSE:KO) (KO) fell 3.3% after the company’s second quarter revenues of $11.54 billion fell 5% year over year and missed the Zacks Consensus Estimate of $11.71 billion. Also, organic revenues are expected to rise 3% this year, less than the previous range of 4–5%. Adjusted earnings of 60 cents per share declined 5% year over year, but managed to beat the Zacks Consensus Estimate of 58 cents.

Decline in Coca-Cola led the Consumer Staples Select Sector SPDR (XLP) 1.5% lower, which was biggest loser among S&P 500 sectors. Key consumer staples stocks including CVS Health (NYSE:CVS) Corporation (CVS), Costco Wholesale Corporation (NASDAQ:COST) ( COST), Altria Group (NYSE:MO), Inc. (MO), Procter & Gamble Company (NYSE:PG) (PG) and Philip Morris International (NYSE:PM), Inc. ( PM) decreased 1.2%, 0.9%, 1.7%, 1% and 1.7%, respectively.

However, some of the losses in the Dow, led by fall in Coca-Cola, were curtailed after Apple Inc (NASDAQ:AAPL) (AAPL ) registered its best one-day increase since Apr 2014. Shares of Apple rose 6.6% after its fiscal third quarter earnings per share and revenues of $1.42 and $42.4 billion surpassed the Zacks Consensus Estimate of $1.39 and $41.8 billion, respectively.

In other earnings news, shares of Comcast Corporation (NASDAQ:CMCSA) (CMCSA) rose 1.1% after its second quarter earnings per share and revenues of 83 cents and $19,269 million beat the Zacks Consensus Estimate of 82 cents and $19,043 million, respectively.

Further, Boeing Company (NYSE:BA) (BA) increased 0.8% after incurring second-quarter adjusted loss of 44 cents per share, narrower than the Zacks Consensus Estimate of a loss of 88 cents. Revenues of $24.76 billion increased 1% year over year and was also higher than the Zacks Consensus Estimate of $24.45 billion.

In economic news, the National Association of Realtors (NAR) reported that the Pending Home Sales Index increased 0.2% from May to 111 in June, reaching its second best settlement in the last 12 months. However, last month’s increase was lower than the consensus estimate of 1.6% increase.

The U.S. Department of Commerce reported that durable orders decreased 4% in June to $219.8 billion, wider than a fall of 2.8% in May. It was also wider than the consensus estimate of 1.4% drop.

Additionally, U.S. Energy Information Administration (EIA) reported a surprise rise in crude inventories. EIA reported that the U.S. commercial crude oil inventories rose 1.7 million barrels to 521.1 million for the week ended July 22. This was in contrast to a decrease of 827,000 barrels reported by the American Petroleum Institute (API) a day earlier. WTI crude fell 2.4% to $41.92 per barrel, reaching its lowest settlement in last three months. Brent crude also slumped 3.2% to $43.47 a barrel.

Decrease in oil prices led the Energy Select Sector SPDR (XLE (NYSE:XLE)) to fall 1%, which emerged as one of the biggest decliners among the S&P 500 sectors. Dow components Exxon Mobil Corporation (NYSE:XOM) (XOM) and Chevron Corporation (NYSE:CVX) ( CVX) decreased 0.7% and 0.4%, respectively.