Wall St trades flat in wake of Fed, economic data

By Chuck Mikolajczak

NEW YORK (Reuters) - U.S. stocks barely budged on Thursday as investors exercised caution in the wake of the Federal Reserve's policy announcement and some encouraging economic data.

The central bank said on Wednesday that it will keep buying $85 billion of bonds per month, noting weaker economic signals resulting from the partial government shutdown earlier in October. The Fed's statement also dropped a phrase expressing concern about a run-up in borrowing costs, suggesting greater comfort with the current level of interest rates.

A gauge of business activity in the Midwest blew past expectations in October, while weekly initial jobless claims dipped in the latest week, countering recent economic data that pointed to tepid economic growth.

 

The Fed statement, coupled with the economic data, opened the possibility that the central bank may begin to trim its bond-buying program earlier than previously thought.

"The Chicago PMI spiked higher significantly, showing strength in manufacturing in that region, and the Fed is very data dependent," said Tim Ghriskey, chief investment officer of Solaris Group in Bedford Hills, New York.

"So there is going to be talk because of this that the Fed is closing in on tapering bond purchases."

Visa Inc lost 2.9 percent to $197.86, making it the biggest drag on both the Dow and the S&P 500 a day after the world's largest credit and debit card company reported a 28 percent drop in quarterly profit.

The Dow Jones industrial average inched up 2.87 points, or 0.02 percent, to 15,621.63. The S&P 500 added 2.21 points, or 0.13 percent, to 1,765.52. The Nasdaq Composite rose 9.16 points or 0.23 percent, to 3,939.78.

The Dow has gained about 3 percent in October, while the S&P 500 had advanced nearly 5 percent and the Nasdaq has added about 4 percent.

Shares of Exxon Mobil Corp , one of the largest U.S. companies by market capitalization, rose 1.6 percent to $90.20 after the company reported adjusted third-quarter earnings that beat expectations.

Facebook reported strong growth in its mobile advertising business late on Wednesday, though it said it didn't plan to boost the frequency of ads shown to users. Facebook's stock shot up 4 percent to $50.97.

Expedia jumped 16.3 percent to $58.12 and ranked as the S&P 500's best performer a day after reporting third-quarter earnings that exceeded expectations.

Of the 355 companies in the S&P 500 that had reported earnings through Thursday morning, 68.2 percent have topped Wall Street's expectations, above both the 63 percent beat rate since 1994 and the 66 percent beat rate for the past four quarters, according to Thomson Reuters data.

Revenue has been lackluster, however, with 53.6 percent of companies besting expectations, well shy of the 61 percent beat rate since 2002, but slightly above the 49 percent rate for the past four quarters.

(Editing by Jan Paschal)