Stocks book records as Fed announces taper

Fed will reduce asset purchases by $15B later this month

U.S. stock indexes climbed to record highs Wednesday as traders digested the news that the Federal Reserve will begin tapering its asset purchases later in November. 

The Dow Jones Industrial Average rose 104 points, or 0.29%, while the S&P 500 index and the Nasdaq Composite index rose 0.65% and 1.04%, respectively. The gains propelled all three of the major averages into record territory.

Ticker Security Last Change Change %
I:DJI DOW JONES AVERAGES 34899.34 -905.04 -2.53%
SP500 S&P 500 4594.62 -106.84 -2.27%
I:COMP NASDAQ COMPOSITE INDEX 15491.656804 -353.57 -2.23%

The Federal Reserve concluded a two-day meeting on Wednesday, announcing it would begin reducing the pace of its Treasury purchases by $10 million and mortgage-backed securities by $5 billion. The market expects the first rate hike to occur in July 2022. 

"The Committee judges that similar reductions in the pace of net asset purchases will likely be appropriate each month, but it is prepared to adjust the pace of purchases if warranted by changes in the economic outlook," the Federal Open Market Committee said in its statement. 

Following the Fed's decision, the yield on the 10-year note closed up 3 basis points to 1.58% 

In economic data, the ADP Employment report showed private-sector payrolls added 571,000 workers in October, exceeding the 400,000 new jobs that analysts surveyed by Refinitiv were expecting. The October nonfarm payroll report is due out Friday. 

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In stocks, Zillow Group Inc. is shutting down its home-buying business and plans to cut 25% of its workforce after posting an unexpected loss as home values fell below what the company paid. Shares have fallen 56% from their Feb. 16 record high through Wednesday. 

Ticker Security Last Change Change %
ZG ZILLOW GROUP, INC. 55.07 -1.04 -1.85%

CVS Health Corp. hiked its full-year adjusted profit forecast as strong demand for COVID-19 vaccines and tests bolstered the company’s quarterly results. The pharmacy chain administered more than 11 million shots and more than 8 million tests last quarter.

Ticker Security Last Change Change %
CVS CVS HEALTH CORP. 91.52 -1.13 -1.22%

Activision Blizzard Inc.’s holiday-season outlook fell short of analysts’ expectations after the video game maker said two hit games would be delayed due to the recent leadership changes at the company.  

Ticker Security Last Change Change %
ATVI ACTIVISION BLIZZARD, INC. 60.62 -0.29 -0.48%

Mondelez International Inc., the maker of Oreo cookies and Sour Patch Kids, raised its full-year sales outlook as price increases and strong overseas demand helped earnings and revenue exceed Wall Street estimates. The company is planning to raise prices at the start of 2022.  

Ticker Security Last Change Change %
MDLZ MONDELEZ INTERNATIONAL, INC. 60.25 -1.07 -1.74%

Bed, Bath & Beyond Inc. announced a marketing collaboration with grocer Kroger Inc. in which Kroger will offer baby and home products carried by Bed Bath & Beyond through Kroger.com and a small-scale physical store pilot beginning next year. Bed Bath & Beyond also announced a $1 billion share repurchase program.  

Ticker Security Last Change Change %
BBBY BED BATH & BEYOND, INC. 20.90 -1.39 -6.24%

Deere & Co. workers rejected a contract offer, continuing a three-week-old strike. The latest offer would’ve raised wages by 10% this year and 5% in 2023 and 2025 in addition to giving lump-sum bonuses in 2022, 2024 and 2026.   

Ticker Security Last Change Change %
DE DEERE & CO. 359.30 -8.56 -2.33%

Eco-friendly sneaker maker Allbirds Inc. shares surged in their Nasdaq Markets debut after opening at $21.21. The company raised more than $300 million in its U.S. initial public offering, pricing 20.2 million shares at $15 apiece on Tuesday evening. 

Ticker Security Last Change Change %
BIRD ALLBIRDS INC 19.75 -0.54 -2.66%

In commodities, West Texas Intermediate crude oil fell $3.05 to $80.86 a barrel and gold slid $25.10 to $1,763.60 an ounce.  

Overseas markets were mostly lower. 

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European bourses traded mixed with France’s CAC 40 adding 0.34% and Germany’s DAX 30 edging up 0.03% while Britain’s FTSE 100 declined 0.36%. 

In Asia, China’s Shanghai Composite index slipped 0.2% and Hong Kong’s Hang Seng index lost 0.3%. Japan’s Nikkei 225 was closed for holiday.