Weak GDP, Fed Pressure Dow Jones Industrial Average

3 Bullish Stock Picks for May; Plus, Fed in Focus

Apr 29, 2015 at 4:22 PM
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The Dow Jones Industrial Average (DJIA) faltered out of the gate and failed to recover, as traders digested a raft of crucial economic data throughout the day. Commanding the most attention early on was the preliminary look at U.S. first-quarter gross domestic product (GDP), which came in below estimates. But by the late afternoon, the Federal Open Market Committee's (FOMC) policy statement was in focus. Overall, the document gave few clues as to the timing of the central bank's planned interest-rate liftoff, and while the Fed did acknowledge economic hiccups -- and partially attributed the first-quarter slowdown to "transitory factors" -- it didn't rule out a June rate hike. 

Continue reading for more on today's market, including:

The Dow Jones Industrial Average (DJIA - 18,035.53) headed south out of the gate and never found its way out, ending 74.6 points, or 0.4%, lower. Twenty-one of the Dow's 30 components retreated, paced by a 3.4% loss by UnitedHealth Group Inc. (NYSE:UNH). Leading the nine advancers was Caterpillar Inc. (NYSE:CAT), up 1.5%.

The S&P 500 Index (SPX - 2,106.85) slid 7.9 points, or 0.4%, but still finished atop the 2,100 level. The Nasdaq Composite (COMP - 5,023.64) performed even worse than its peers, giving back 31.8 points, or 0.6%.

The CBOE Volatility Index (VIX - 13.39) added 1 point, or 7.9%, clawing its way back above the 13 mark.

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5 Items on Our Radar Today
:

  1. Following a two-day meeting, the Fed announced it will once again keep interest rates near zero. Specifically, the Fed's statement said it will raise rates "when it has seen further improvement in the labor market and is reasonably confident that inflation will move back to its 2% objective over the medium term." (L.A. Times)
  2. The advance reading of the U.S. first-quarter GDP came in at 0.2% -- the weakest metric of its kind in a year -- indicating sluggish economic growth from January through March. Among the factors weighing on the economy were harsh winter weather, a stronger dollar, and a labor dispute at a number of West Coast ports. Economists had forecast a 1.0% annualized expansion rate. (Reuters)
  3. Options traders took aim at post-earnings highs for FEYE.
  4. Breaking down this six-figure bet on QUALCOMM, Inc. (NASDAQ:QCOM).
  5. Shares of this airline crashed following a number of negative developments.
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Commodities
:

Crude surged to its highest settlement price of 2015, helped by declining stockpiles at a key Oklahoma storage hub, and a smaller-than-projected rise in overall inventories. By the close, the June-dated contract was $1.52, or 2.7%, higher, at $58.58 per barrel.

Gold pulled back after the Fed offered few rate-hike-timing clues -- but the malleable metal managed to maintain its foothold atop the $1,200 level. By day's end, gold for June delivery was down $3.90, or 0.3%, at $1,210 per ounce.

 

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