Stocks flat as Fed signals exit from emergency measures

Gasparino: Fed raising rates ‘clear sell signal’ for meme stock investing

FOX Business’ Charlie Gasparino reacts to Fed Chair Powell neglecting to address the meme stock frenzy.

U.S. equity markets were little changed Thursday as investors digest the Federal Reserve’s plan to exit from the emergency measures put in place during the COVID-19 pandemic. 

The Dow Jones Industrial Average futures fell 7 points, or 0.02%, while the S&P 500 and the Nasdaq Composite were lower by 0.01% and 0.17%, respectively. 

The Federal Reserve on Wednesday held its benchmark interest rate near zero and maintained its bond-buying program at a pace of $120 billion per month, but moved up the forecast for the first rate hike to 2023 from 2024. More members, but not a majority, said the first rate hike could occur in 2022.  

FED'S POWELL USES LUMBER PRICES TO EXPLAIN INFLATION PATH

In stocks, financials including Bank of America Corp., Citigroup Inc. and JPMorgan Chase & Co. were among the bright spots as interest rate hikes would boost net interest margin, or the spread between interest income earned from their borrowers and the amount of interest paid out to their lenders. 

The threat of rate hikes coming sooner than the Fed had previously planned weighed on growth stocks like Tesla Inc., Square Inc. and Facebook Inc.

Meanwhile, Microsoft Corp. named CEO Satya Nadella as chairman of the board. Nadella replaces John Thompson who will serve as independent director. 

In earnings, homebuilder Lennar Corp. beat on both the top and bottom lines as higher prices helped offset supply shortages. The company said it is grappling with higher costs for materials and a labor shortage.

Kroger Co. raised its annual profit forecast as upgrades to its online options provided a lift. Both earnings and revenue were ahead of expectations.  

Elsewhere, Lordstown Motors Corp. said on Thursday that it does not have any confirmed orders for its electric pickup truck. The clarification comes two days after President Rich Schmidt told attendees at an Automotive Press Association event that the company had received binding orders for the first two years of production. 

Miners Newmont Corp. and Barrick Gold Corp. were under pressure as gold plunged $79.50 to $1,781.90 an ounce, its lowest since May 6. 

West Texas Intermediate crude oil slipped 14 cents to $72.01 a barrel. 

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Overseas markets were mostly weaker.

European bourses were lower mixed with Britain’s FTSE 100 falling 0.43% and France’s CAC 40 down 0.03% while Germany's DAX 30 ticked up 0.1%. 

In Asia, Japan’s Nikkei 225 lost 0.93%, China’s Shanghai Composite rose 0.21% and Hong Kong’s Hang Seng index advanced 0.43%.  

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