Dow Rides Fed Rate Hike to Fourth Straight Record Close

A late-day bank selloff sent the S&P 500 into the red

by Patrick Martin

Published on Dec 13, 2017 at 4:29 PM

The Dow Jones Industrial Average (DJIA) secured a fourth straight record close, after the Fed officially raised interest rates by a quarter point and lifted its economic outlook for 2018. The widely expected move also came with a forecast for three more rate hikes in 2018 -- unchanged from the central bank's previous statement. Outgoing Fed Chair Janet Yellen cited tax reform optimism as a driver behind the policymakers' hiked gross domestic product (GDP) forecast for next year, and she even weighed in on bitcoin, saying "it is not a stable source of value."

In fact, markets today were optimistic over reports of a tentative agreement on a GOP tax plan, and President Trump's comments that he would support a bill with 21% corporate tax rate. However, while the Nasdaq Composite (IXIC) followed the Dow higher, a late-day bank selloff sent the S&P 500 Index (SPX) into the red, snapping a four-day winning streak.

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

  • 2 oil stocks to sell now, if past is prologue.
  • Buy these blue-chip stocks after the Fed rate hike.
  • The Apple investment that dropped this tech stock.
  • Plus, behind the big silver abandonment; Finisar's big day; and NKE's new partnership.

The Dow Jones Industrial Average (DJIA - 24,585.43) finished 80.6 points, or 0.3%, higher, after notching an intraday high of 24,666.02. Caterpillar (CAT) led 19 Dow stocks higher with its 3.6% win, while IBM (IBM) paced the 11 decliners with its 1.8% loss.

The S&P 500 Index (SPX - 2,662.85) finished 1.3 points lower, after topping out at an all-time peak of 2,671.88. The Nasdaq Composite (IXIC - 6,875.80) added 13.5 points, or 0.2%.

The CBOE Volatility Index (VIX - 10.18) added 0.3 point, or 2.6%.

Closing Summary Indexes Dec 13

NYSE and Nasdaq Dec 13

5 Items on Our Radar Today

  1. Target (TGT) has agreed to buy Shipt Inc, a grocery-delivery startup, for $550 million in cash. It is the second move this year indicative of efforts from Target to challenge Amazon.com (AMZN) and Wal Mart (WMT) in logistics operations and same-day shipping. The deal will allow about half of Target stores to offer same-day delivery by next summer. (Bloomberg)
  2. Lost in the shuffle amid the interest rate news, the consumer price index (CPI) climbed 0.4% in November -- in line with expectations. Higher gas prices can be attributed to the rise. Core inflation, which removes energy and food prices, rose by a smaller-than-expected 0.1%. (MarketWatch
  3. Breaking down the best time to buy oversold silver.
  4. Options bulls are flocking to surging Finisar stock.
  5. Analysts are lagging behind Nike stock.

    There are no notable earnings to report.

Unusual Options Activity Dec 13
Data courtesy of Trade-Alert

Commodities

Crude slated for January delivery fell 54 cents, or 1%, to close at $56.60 per barrel, after U.S. crude output grew to record highs and gasoline inventories rose by more than expected last week.

After flirting with five-month lows earlier, February-dated gold futures gained $6.90, or 0.6%, to settle at $1,248.60 an ounce, snapping a five-day losing streak. The Fed's decision to raise interest rates moved the safe-haven asset even higher in electronic trading. 

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