U.S. large-cap stocks remain tightly range bound, within the binds of a ultra-tight two-month consolidation pattern amid a battle at overhead resistance from early March highs. The Federal Reserve’s policy announcement was largely a nonevent as policymakers shrugged off a spate of weak economic reports recently, raising the odds of a June rate hike.
In the end, the Dow Jones Industrial Average gained a fraction, the S&P 500 lost a fraction, the Nasdaq Composite lost 0.4% and the Russell 2000 lost 0.6%. Treasury bonds were mostly weaker, the dollar was mostly stronger, gold lost 0.7% and oil was choppy but eventually gained 0.3%.
Financial stocks led the way with a 0.6% gain while REITs were the laggards, down 1.3%. Breadth was negative, at 1.5 decliners to every advancing issue on the NYSE.
Weight Watchers International, Inc. (NYSE:WTW) gained 9.3% on a first-quarter earnings beat on double-digit year-over-year subscriber growth. First Solar, Inc. (NASDAQ:FSLR) gained 11.8% on a Q1 earnings and revenue beat.
Akamai Technologies, Inc. (NASDAQ:AKAM) dropped 15.5% on disappointing guidance on continuing weakness in its video transmission business for internet platform customers. Online crafts retailer Etsy Inc (NASDAQ:ETSY) dropped 7.8% on weaker-than-expected earnings and management changes. And Walt Disney Co (NYSE:DIS) fell 2.4% amid widespread pressure on media stocks, boosting the May $114 puts recommended to Edge Pro subscribers to a near 80% gain since recommended earlier this week.
Apple Inc. (NASDAQ:AAPL) dropped a fraction after reporting mixed results, with better earnings but a revenue miss. iPhone unit sales missed estimates amid ongoing weakness in China. Forward guidance was weak, but Cupertino is well known for lowering expectations.
On the economic front, a weak ADP private-payrolls report lowered expectations for Friday’s big jobs number, rising 177,000 versus the 180,000 expected and down from the 255,000 reported in March. Separately, the ISM services report was strong — continuing the trend of solid “soft” economic data — coming in at 57.5 for April versus the 55.8 expected and the 55.2 reported in March. New orders surged to 63.2 from 58.9 prior with only 8% of respondents reporting lower orders.
There were some big earnings after the close as well, with Facebook Inc (NASDAQ:FB) reporting better-than-expected results despite strong user growth. Earnings of $1.04 per share beat estimates of 87 cents on revenues of $8.03 billion, versus $7.85 billion expected.
But daily active users increased 18% from last year to 1.28 billion. Tesla Inc (NASDAQ:TSLA) reported a larger-than-expected loss of $1.33 per share (vs. the 55-cent loss expected) on better-than-expected revenues of $2.7 billion (vs. $2.56 billion expected).
TSLA is trading down about 1% in extended trading while FB is down nearly 4% as management warns of slowing ad revenue growth. Thursday will be busy as well, with economic updates on productivity and factory orders as well as another batch of Q1 earnings.
Anthony Mirhaydari is founder of the gain (ETFs) and Edge Pro (Options) investment advisory newsletters. A two-week and four-week free trial offer has been extended to Investorplace readers. Redeem by clicking the links above.