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Market Update

Wall Street Advances As Fed Signals December Rate Hike Likely

Author: Nichole Harper
Last Update: 8:17 PM ET October 28 2015

[4:30 PM New York City, New York Federal Reserve left rates on hold but held out for a possible rate hike at the next meeting in December. The accompanying statement from the Fed suggested that the U.S. economy is healthy policy makers are less concerned about the global backdrop.

Market indexes on Wall Street closed higher after the Federal Reserve left interest rates unchanged.

Indexes dropped initially after the Fed released its statement but quickly recovered from the 1% drop. The wording of the statement also convinced more investors that the economy is healthy enough to withstand the possible rate hike in the near future.

Fed also held out for a rate hike at its next meeting in December and the central bank has not lifted rates nearly in a decade.

Separately, U.S. trade deficit in August widened by $6.5 billion to $48.3 billion from the revised $41.8 billion in June. Exports in August fell $3.7 billion but imports grew $2.8 billion from July.

The goods deficit increased by $6.6 billion and service surplus edged up $0.1 billion, the Department of Commerce said.

On Wall Street, Tollbooth Strategy Index increased 93.27 or 0.9% to 10,949.18.

S&P 500 index rose 13.24 or 0.6% to 2,079.12 and the Nasdaq Composite Index gained 35.12 or 0.7% to 5,065.06.

Crude oil in New York jumped 6% or $2.54 to $45.74 a barrel and gold advanced $9.87 to $1,176.75 an ounce.

U.S. Movers

Apple Inc (AAPL) jumped 2.3% or $2.66 to $117.22 after the pc and mobile and media devices maker reported revenues in the fourth-quarter ending on September 26 soared 22.3% from a year ago to $51.5 billion.

Net income in the quarter surged 30.6% to $11.1 billion or $1.96 per diluted share compared to $8.5 billion or $1.42 from the same quarter last year.

Revenues in America in the quarter jumped 8% to $21.8 billion and revenues in Greater China doubled to $12.5 billion from $6.29 billion in a year ago period. Revenues in Asia Pacific region soared 27% to $2.70 billion.

Apple said iPhone unit sales in the quarter surged 22.3% to 48 million units but sales of iPad tumbled 20% to 9.9 million units while unit sales in Mac rose 3% to 5.7 million units.

For the first-quarter, Apple forecasted revenue between $75.5 billion and $77.5 billion and gross margin between 39% and 40%.

Northrop Grumman Corporation (NOC) soared 5.5% or $9.91 to $190.58 after the security products maker said net sales in the third-quarter ending in September was nearly flat from a year ago to $5.98 billion.

Net income in the quarter jumped 9.1% to $516 million or $2.75 per diluted share compared to $473 million or $2.26 from the same quarter last year.

Separately yesterday, the company said the U.S. Air Force has selected to deliver the nation''s new Long-Range Strike Bomber, wining of Pentagon sweepstakes contract valued at as much as $80 billion to deploy Bombers in the mid-2020.

Twitter Inc (TWTR) slumped 4.2% or $1.31 to $30.04 after the social media services provider revenues in the third-quarter ending in September surged 57.5% from a year ago to $569 million.

Net loss in the quarter narrowed to $131.7 million or 20 cents per diluted share compared to $175.5 million or 29 cents from the same quarter last year.

Twitter average active monthly users in the quarter were 320 million from 316 million in the prior quarter, the slowest since its go public in 2013.

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Sources: Data collected by 123jump.com and Ticker.com from company press releases, filings and corporate websites. Market data: BATS Exchange. Inc