Stocks were extending their big rally in morning trading as investors awaited both the Fed and additional election results from around the country. While the election results have been slow to come, the Fed was on schedule and on target with expectations to keep rates low and voice a willingness to use all of its tools to keep supporting the economy in the face of the ongoing coronavirus pandemic.
ECONOMIC EVENTS: In the U.S., initial jobless claims fell 7,000 to 751,000 in the week ended October 31. Third quarter productivity slowed to a 4.9% pace, which was a bit shy of expectations.
In central bank news, the Federal Reserve kept its interest rate benchmark unchanged at 0%-0.25%, with the bank saying that COVID-19 is causing "tremendous" economic hardship and that the path of the country's economy will depend "significantly" on the course of the virus. In a press conference after the rate setting committee meeting, Fed chairman Jerome Powell said that a full economic recovery is unlikely until people feel safe, and that while he sees job growth continuing, it will do so at a moderated pace.
Meanwhile, the Bank of England voted unanimously to maintain its Bank Rate at 0.1%. In addition, its Committee voted unanimously to maintain the stock of sterling non-financial investment-grade corporate bond purchases at GBP 20B; to continue with the existing program of GBP 100B of UK government bond purchases; and also for the Bank of England to increase the target stock of purchased UK government bonds by an additional GBP 150B to take the total stock of government bond purchases to GBP 875B.
TOP NEWS: Shares of Qualcomm (QCOM) jumped 12.75% following the company's Q4 results. Morgan Stanley analyst Joseph Moore, who was among many on the Street to raise price targets following what he called an "exceptionally strong" quarter, thinks 2021 "looks to be the sweet spot for Qualcomm for 5G" with improvements that should prove to be sustainable next year.
Shares of General Motors (GM) were 5.5% higher after the automaker reported better than expected profit in the third quarter. Of note, General Motors said it plans to reinstate a dividend in mid-2021 if the economic recovery continues.
Shares of Alibaba (BABA) fell 2.7% in New York trading despite posting what Chairman and CEO Daniel Zhang called "another strong quarter."
The Department of Justice has filed an antitrust lawsuit to block Visa's (V) acquisition of Plaid over concerns the deal would harm competition in the global payments system. In response, Visa said it "strongly disagrees with the Department of Justice, whose attempt to block Visa's acquisition of Plaid is legally flawed and contradicted by the facts."
MAJOR MOVERS: Among the noteworthy gainers were Upwork (UPWK) and Meredith (MDP), which gained a respective 43.6% and 23.6% after reporting quarterly results.
Among the notable losers was Bluebird Bio (BLUE), which slid 16.6% after pushing back the timing of its BLA submission for LentiGlobin for sickle cell disease to late 2022. Also lower were Hanesbrands (HBI) and Clovis (CLVS), which fell 18.6% and 21.2%, respectively, after reporting quarterly results.
INDEXES: The Dow rose 542.52, or 1.95%, to 28,390.18, the Nasdaq gained 300.15, or 2.59%, to 11,890.93, and the S&P 500 advanced 67.01, or 1.95%, to 3,510.45.
