Stocks opened higher Wednesday and kept climbing through the close. In focus were comments from several Federal Reserve officials – many of whom echoed the hawkish tone Fed Chair Jerome Powell has struck recently regarding interest rates.
However, the latest round of corporate earnings reports lifted sentiment, with burrito chain Chipotle Mexican Grill (CMG) among those posting strong results.
There were no fewer than four senior central bank officials making appearances Wednesday, including Fed Governor Adriana Kugler. Speaking at the Brookings Institute in Washington D.C., Kugler said that she's pleased with the progress that's been made so far with bringing inflation down and added that "at some point" it will be appropriate to cut the federal funds rate.
From just $107.88 $24.99 for Kiplinger Personal Finance
Be a smarter, better informed investor.
Sign up for Kiplinger’s Free Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
Still, she emphasized that "it is critical" inflation returns to the Fed's 2% target and "if progress on disinflation stalls, it may be appropriate to hold the target range steady at its current level for longer."
According to CME Group's FedWatch Tool, futures traders are currently pricing in an 18% chance the Fed will cut rates by a quarter-percentage point in March, down from 53% one week ago. The odds for a May cut are 53%.
Chipotle, Roblox rise after earnings
In single-stock news. Chipotle Mexican Grill rose 7.1% after the burrito chain reported top- and bottom-line beats for its fourth quarter. The company also said same-store sales were up 8.4% for the three-month period, higher than analysts were expecting.
"Same-store sales benefited from higher customer traffic and, to a lesser extent, an increase in the average check," says Argus Research analyst John Staszak.
Roblox (RBLX) was another post-earnings gainer, with the metaverse stock surging 10.3% after its results. In addition to fourth-quarter revenue that was up 30% year-over-year to $749.9 million, bookings jumped 25% to $1.1 billion. Average daily active users and average monthly unique payers were also up by double-digit percentage points.
Snap craters after top-line miss
At the other end of the spectrum was Snap (SNAP), which crumbled 34.6% after earnings. While the Snapchat parent reported higher-than-expected fourth-quarter earnings of 8 cents per share, revenue of $1.36 billion fell short of analysts' estimates. Additionally, the company gave weak first-quarter guidance.
"While Snap may have been spending in the right places, the returns on those investments have been slower to materialize than some would like, and 2023 may be remembered as a lost year for the company, where user growth decelerated and revenues were flat," says Scott Kessler, global sector lead for technology, media and telecommunications at Third Bridge. While Snap seems to have made some progress with its initiatives, today's price action indicates that investors don't want to wait, Kessler adds.
Buffett scoops up more OXY shares
In non-earnings news, Occidental Petroleum (OXY, +0.1%) made headlines after a Tuesday night regulatory filing revealed Warren Buffett's Berkshire Hathaway (BRK.B) bought 4.3 million OXY shares between February 1 and February 5.
Buffett & Co. first started accumulating shares of the energy stock in the first quarter of 2022. At the end of Q3 2023, the holding company owned more than 224 million Occidental shares, accounting for 4.6% of the Berkshire Hathaway equity portfolio. Considering OXY declined 3.6% in January, Buffett was likely buying the dip on one of his favorite oil stocks.
As for the main indexes, the Dow Jones Industrial Average rose 0.4% to 38,677 and the S&P 500 added 0.8% to 4,995, both new record closes. The Nasdaq Composite tacked on 1.0% to 15,756.
Related content
- Does NYCB's Selloff Make Regional Bank Stocks a Buy?
- What to Know About The Recalls at Honda and GM
- How to Find the Best Emerging Market Stocks
-
Dow Adds 314 Points to Thanksgiving Rally: Stock Market TodayInvestors, traders and speculators enjoy the best Thanksgiving Week gains for the major stock market indexes in more than a decade.
-
Why Prepaying Your Retirement Dreams Might Be a Financial Game ChangerHe bought his retirement home more than a decade before he plans to retire. Was it the right move?
-
Dow Adds 314 Points to Thanksgiving Rally: Stock Market Today
Investors, traders and speculators enjoy the best Thanksgiving Week gains for the major stock market indexes in more than a decade.
-
Unwrapping Your Estate Plan for Your Kids: A Gift That'll Keep Giving Long After the HolidaysThe holidays offer families a perfect opportunity to discuss important, often difficult topics like long-term care, estate plans and legacy.
-
5 Ways to Teach Your Kids About Giving Back, From a Financial PlannerTeaching kids generosity goes beyond simple rules and can involve fun, practical strategies, such as letting them lead giving, volunteering together and more.
-
I'm a Financial Planner: Here's How You Can Use AI to Improve Your FinancesApps can help with budgeting, saving and investing, financial coaching and debt management. But providing your personal information can also raise your risks.
-
Dow Gains 664 Points as Rate-Cut Hopes Rise: Stock Market TodayMarkets are pricing in higher odds for a December rate cut, fueling a major rally in stocks ahead of the Thanksgiving holiday.
-
When Checkout Charity Gets Uncomfortable — and Maybe Even IllegalCashiers asking customers to 'round up' their total for charity can cross an ethical line if there's no disclosure about the benefiting organization.
-
Four Ways to Find Free Money to Pay for College: Affluent Families Can Apply, TooFamilies can access scholarships, grants and incentives by strategically positioning their students in terms of merit, skills and timing.
-
3 Tax-Smart DAF Strategies Advisers Can Put to Work for Clients During Giving SeasonDonor-advised funds can help clients maximize their philanthropy through front-loading deductions, donating appreciated assets and 'bunching' contributions.
