US open: Stocks mixed ahead of Fed policy decision

by | Apr 28, 2021

Wall Street stocks were mixed early on Wednesday following earnings from some big-name firms and ahead of the latest Federal Reserve policy announcement.
As of 1530 BST, the Dow Jones Industrial Average was down 0.42% at 33,842.12, while the S&P 500 was up 0.16% at 4,193.52 and the Nasdaq Composite was 0.03% firmer at 14,094.33.

The Dow opened 142.81 points lower on Wednesday, reversing modest gains recorded in the previous session.

Google parent company Alphabet posted better-than-expected earnings after the close on Tuesday, sending the group’s stock higher, while Microsoft shares were under pressure despite topping analyst’s estimates with its largest revenue growth since 2018.

Starbucks hiked its full-year outlook, with US same-store sales growth predicted to return to pre-pandemic levels, while aircraft manufacturer Boeing posted a sixth consecutive quarterly loss on Wednesday but stated it still expects to turn a profit in 2021.

Apple and Facebook were both slated to report after the close

Also in focus, President Joe Biden will mark his first 100 days in office by setting out a $1.8tn family support plan that would transform the role of the government in society, according to reports.

In his first joint address to Congress, Biden will propose universal preschool provision, two years of free community college, $225.0bn for childcare and monthly payments of at least $250 to parents, according to the Associated Press reported. He will state that taxing the rich will be the best way to grow the US economy and help poor and middle-class families.

On the macro front, mortgage application volume fell 2.5% week-on-week in the seven days ended 23 April, according to the Mortgage Bankers Association, despite the average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances decreasing to 3.17% from 3.20%, with points decreasing to 0.30 from 0.36 for loans with a 20% down payment, to their lowest rate since the end of February.

Elsewhere, in March, the US trade goods balance came in at -$90.6bn, a 4% widening month-on-month, with exports increasing 8.7% and imports growing 6.8%, according to the Commerce Department.

An advance reading of last month’s wholesale inventories report revealed wholesale inventories shot up 1.4% after rising 0.9% in February. However, stocks at retailers tumbled 1.4% after ticking up 0.1% in February.

Still to come, the Federal Reserve’s two-day policy meeting will draw to a close on Wednesday, with the central bank not expected to take any action but to defend its policy of letting inflation run hot on a temporary basis. Chairman Jerome Powell will hold a press conference following the meeting at 1830 BST.

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