Mid-Afternoon Market Update: Fed Leaves QE Unchanged; Shocks Market and Sparks a Huge Rally
Toward the end of trading Wednesday, the Dow traded up 0.99 percent to 15,682.70 while the NASDAQ jumped 1.00 percent to 3,782.49. The S&P also rallied, gaining 1.22 percent to 1,725.78.
The FOMC statement dominated headlines this afternoon after it surprised investors, holding QE at $80 billion a month, and not beginning tapering like most analysts expected.
The announcement sent markets soaring, with S&P futures gaining 15 points in seconds.
The forward guidance left tapering open to interpretation, and gave little hint as to when the Fed would begin the program other than to say that it would begin when economic conditions supported it.
Equities Trading UP
Adobe Systems (NASDAQ: ADBE) shot up 9.00 percent to $52.50 after the company reported that its subscription revenue climbed 73% to $299.4 million and its Creative Cloud service added 331,000 paying subscribers in the same quarter.
Shares of NGT Advanced Technologies (NASDAQ: GTAT) were also on the rise, gaining 9.94 percent to $7.57 after a report from Canaccord Genuity stated the company was poised to benefit from higher sapphire prices.
FedEx (NYSE: FDX) was also up, gaining 5.07 percent to $116.22 after the company reported a rise in its fiscal first-quarter profit and the Fed's announcement to not Taper.
Equities Trading DOWN
Shares of Tower Group International (NASDAQ: TWGP) were down 27.64 percent to $10.02. Tower Group announced its plans to release its Q2 results during the week of October 7, 2013. FBR Capital downgraded the stock from Outperform to Market Perform.
Triumph Group (NYSE: TGI) was also down, falling 8.22 percent to $72.13 after the company announced it would have higher pre-tax program costs than expected.
In commodity news, oil traded up 2.76 percent to $108.33, while gold traded up 3.61 percent to $1,356.90. Silver traded up 4.76 percent Wednesday to $22.79, while copper rose 2.93 percent to $3.31.
European shares were mostly higher today. The Spanish Ibex Index gained 0.78 percent, while Italy's FTSE MIB Index rose 0.30 percent. Meanwhile, the German DAX gained 0.45 percent and the French CAC 40 rose 0.60 percent while U.K. shares dipped 0.17 percent.
The Mortgage Bankers Association reported that its index of mortgage application activity rose 11.20% in the week ended September 13 versus the prior week. US housing starts rose 0.9% to an annual rate of 891,000 in August.
However, economists were expecting housing starts to reach an annual rate of 921,000. Crude stockpiles declined 4.4 million barrels for the week ended September 13, the US Energy Information Administration reported.
However, analysts were expecting a fall of 1.5 million barrels. The Federal Open Market Committee will announce its policy decision and economic projections at 2:00 p.m. ET.
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