By Anora Mahmudova and Barbara Kollmeyer, MarketWatch
Energy stocks sell off as oil slide resumes
NEW YORK (MarketWatch) -- U.S. stocks generally pulled back
after the Federal Reserve's policy-making committee reiterated it
plans to remain patient and watch the data as it decides when to
raise interest rates.
The Fed gave no sign that it is wavering on hiking interest
rates sometime in the second half of 2015. The U.S. central bank
was upbeat about the economy, while the policy makers repeated that
they think inflation will move back to the 2% target after being
pushed down by temporary factors.
The S&P 500 (SPX) was down 0.1% to 2,023, as big gains in
the tech sector were offset by even bigger losses in energy stocks,
as sliding oil prices hit that sector.
The Dow Jones Industrial Average (DJI) fell 0.3% to 17,382.
Boeing Co (BA) was the top gainer, while Chevron (CVX) and Exxon
Mobil Corp (XOM) were the laggards.
The Nasdaq Composite (RIXF) was up just 0.1% to 4,687, despite
big gains in Apple, its heaviest-weighted stock. Apple's earnings
surprised even the most bullish analysts as the tech giant reported
an $18 billion profit in the latest quarter.
Also read: Apple's secret weapon isn't a new product
Quincy Krosby, market strategist at Prudential Financial, said
investors are realizing the Fed is intent on beginning to normalize
interest rates.
"The Fed is very careful with their language in the statement,
and they are signalling to the markets that they want to start
raising rates sometime this year," Krosby said.
While the reaction in the stock market was largely muted,
Treasurys rallied after the announcement. The yield on 10-year
Treasury notes, which moves inversely to prices, dropped 7 basis
points to 1.75%.
Goldman Sachs and others expect the first hike in short-term
interest rates by September. But Ellen Zentner, an economist at
Morgan Stanley, said Tuesday that she doesn't expect a Fed hike
until March 2016, partly because the downward pressure on inflation
is stronger than expected.
Apple earnings: Apple shares jumped 7% after the company
reported another record for its flagship iPhone, with 74.5 million
phones sold in the fiscal first quarter. Profit rose 38% to a
record high.
Also read: This is what Apple analysts are worried about
Yahoo, Boeing in focus: Shares of Boeing (BA) gained after the
company's fourth-quarter earnings beat forecasts.
Yahoo Inc. (YHOO) jumped after the Internet search engine late
Tuesday said it would spin off its Alibaba Group Holding Ltd.
(BABA) stake into a separate publicly traded company.
U.S. Steel Corp. (X) jumped after the steel producer's earnings
topped Wall Street estimates.
Abiomed Inc. (ABMD) surged 32% after the medical device maker
posted earnings that blew out Wall Street estimates.
On the downside, Ethan Allen Interiors Inc. dropped sharply
after releasing weaker-than-expected results from its holiday
quarter.
Energy companies were selling off as oil prices fell more than
3%. Among S&P 500 components, Denbury Resources (DNR) and Cabot
OIl & Gas Corp (COG) were down more than 7%.
Shake Shack Inc. (SHAK) raised the terms for its initial public
offering and said it would offer 5.75 million shares to be priced
at $17-$19 a share.
Overseas markets: Europe stocks were mixed, with Greece
suffering from another selloff after Prime Minister Alexis Tsipras
stressed he will push for debt relief from the country's
international creditors.
The Nikkei 225 index rose to a fresh one-month high.
Crude-oil prices (CLH5) fell $1.7 to $44.52 a barrel, as another
investment bank downgraded its forecast for the commodity. Barclays
cut its forecasts for WTI crude to $42 a barrel for 2015 from $66
and $57 a barrel for 2016. For Brent crude, Barclays cut its
forecast to $44 a barrel for 2015 from $72 and forecast $60 for
2015.
Gold prices (GCG5) settled lower at $1,284 an ounce.
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