Stocks spent most of Wednesday in negative territory as an onslaught of economic and earnings reports rattled investors early on. These losses quickly accelerated immediately after the central bank issued its latest rate hike, but stocks swung higher as Fed Chair Jerome Powell took the mic in a subsequent press conference.
Today's economic data indicated the labor market remains tight. U.S. job openings jumped to 11.0 million in December from November's downwardly revised 10.4 million, according to the Job Openings and Labor Turnover Survey (JOLTS). And while the January ADP employment report showed private employers added a much lower-than-expected 106,000 jobs in January, Nela Richardson, chief economist at ADP, pointed to "weather-related disruptions on employment" during the reference week. "Hiring was stronger during other weeks of the month, in line with the strength we saw late last year," Richardson added.
On the earnings front, Snap (SNAP) plunged 10.3% after the social media firm said fourth-quarter revenue was flat compared to Q4 2021 – marking its worst quarter for year-over-year sales growth on record – as advertising spending cooled. Making matters worse, SNAP said revenue will likely decline 2% to 10% in the first quarter after falling 7% in January.
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Meanwhile, video-game maker Electronic Arts (EA, -9.3%) reported fiscal third-quarter earnings of 73 cents per share – up from 23 cents per share the year earlier – while revenue rose 5% to $1.88 billion. Net bookings, however, fell 9.3%. The company also said it is ending production of two mobile games –"Battlefield" and "Apex Legends" – due to "challenging market dynamics," said Chris Suh, chief financial officer of Electronic Arts.
Come 2 p.m. Eastern, though, all eyes were squarely on the Federal Reserve. The central bank, as expected, lifted its benchmark interest rate by 25 basis points (0.25%) – its smallest increase since March 2022. In its statement, the rate-setting committee said that while "inflation has eased somewhat," it still remains elevated. As such, "ongoing increases in the target range will be appropriate." Likewise, Fed Chair Powell said in his press conference that the central bank will "stay the course until the job is done."
Experts say the Fed is tasked with walking an increasingly challenging tightrope. "On one side there are concerns of appearing too dovish and risk inflationary measures reigniting within the economy, a mistake made in the 1970s," says Dustin Thackeray, partner and chief investment officer of Crewe Advisors. "The Fed doesn't want to make the same mistakes made in the 1970s of easing too soon and allowing inflation to reignite but they also don't want to tighten too much and push the economy into an unnecessary recession. Given recent comments, it seems they are more willing to err on the side of remaining tight in an attempt to reduce the likelihood of inflation reigniting."
At the close, the Dow Jones Industrial Average was marginally higher at 34,092, the S&P 500 was up 1.1% at 4,119, and the Nasdaq Composite had gained 2.0% to 11,816.
Wall Street's Best Dividend Stocks
We're in the thick of earnings season, which means not only are companies unveiling financial results and future guidance, but a number are also announcing shareholder-friendly initiatives like stock buybacks and dividend hikes. Energy giant Chevron (CVX), for instance, unveiled a $75 billion share repurchase program with its fourth-quarter results. And oil and gas equipment maker Halliburton (HAL) revealed a 33.3% quarterly dividend increase alongside its Q4 report.
Of course, the easiest place for investors to find the best dividend stocks is among the Dividend Aristocrats – the elite group of S&P 500 components that have raised their dividends for at least 25 years straight. This year, there are three new S&P 500 Dividend Aristocrats as of today – bringing the total number of companies exhibiting consistent dividend growth to 67.
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