Stocks Gain On Federal Reserve Update

The Federal Reserve Open Market Committee restated rates will remain low for a “considerable time,” sending volatility into equity, debt and currency markets. Treasury buying was reduced by $5 billion per month and the 2015 GDP estimate was cut to a range of 2.6 percent to 3 percent.

Major Averages

• The Dow Jones Industrial Average rose 24.9 points, or 0.15 percent, to 17,157.
• The S&P 500 climbed 2.6 points, or 0.13 percent, to 2,002.
• The Nasdaq Composite gained 9.4 points, or 0.2 percent, to close at 4,562.

Top Stories

Homebuilder stocks gained Wednesday after the NAHB monthly survey showed homebuilders are more confident than they have been since 2005. The report stated that first time home buyers are still reluctant to enter the market.

The already strong steel sector continued to pick up ground after United States Steel X and Nucor NUE told Wall Street third quarter results will be better than initially expected. US Steel shares gained 10.1 percent while Nucor shares gained 3.9 percent.

To ease US dependence on Russia, NASA granted Boeing BA a $4.2 billion contract to transport astronauts to the International Space Station. Elon Musk’s SpaceEx has a similar $2.6 billion contract.

Stock Movers

Auxilium Pharmaceuticals AUXL shares shot up 44.9 percent to $31.18 after the company received an unsolicited bid to be acquired for $28.10 per share from Endo International plc ENDP.

Lennar LEN shares were also up, gaining 5.8 percent to $41.40 after the company reported better-than-expected fiscal third-quarter earnings.

Shares of Rackspace Hosting RAX were down 17.7 percent to $32.39 after the company said it will remain independent despite "entertaining various proposals" from suitors.

General Mills GIS shares tumbled 4.4 percent to $50.83 after the company reported weaker-than-expected fiscal first-quarter results.

Adobe Systems ADBE was down, falling 4.9 percent to $67.30 after the company issued a weak fiscal fourth-quarter forecast. Adobe reported its Q3 earnings of $0.28 per share on revenue of $1.01 billion.

Commodities

Some profit taking kicked in Wednesday for crude oil futures. WTI was last down 0.77 percent to $94.15 after Tuesday’s two percent gain.

After a three day rally, gold fell below its previous low to $1,222.30 following the Federal Reserve’s interest rate decision. Gold contracts are now the cheapest they have been since January.

Currencies

The US dollar shot to a new 52-week high on news that the Federal Reserve will reduce bond buying by $5 billion a month while keeping rates low. The PowerShares ETF UUP that tracks the performance of the greenback versus a basket of foreign currencies gained 0.63 percent to 22.53.

Global Markets

Asian markets traded higher last night after Tuesday’s sell off. The Shanghai index gained 0.5 percent with Hong Kong's Hang Seng up one percent. Japanese markets gave up 0.1 percent.

European markets were mixed on the day. The Euro Stoxx index, which tracks 50 eurozone blue chips gained 0.5 percent. London's FTSE gave up 0.2 percent, and France's CAC added 0.5 percent.