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* Fed cuts rates by 25 basis points
* GE gains on profit beat, cash flow forecast
* U.S. GDP growth slows less than expected in Q3
* Dow up 0.05%, S&P 500 down 0.04%, Nasdaq down 0.04%
(Updates with Fed statement, changes byline)
By Chuck Mikolajczak
Oct 30 (Reuters) - U.S. stocks were little changed on
Wednesday, rebounding after a brief move lower in choppy trade
on the heels of the policy statement by the U.S. Federal Reserve
that cut interest rates by a quarter of a percentage point.
The Fed cut lowered its policy rate to a target range
between 1.50% and 1.75%, but dropped a previous reference in its
statement to "act as appropriate" to support the economic
expansion, which could signal the Fed may hold off on future
rate cuts. "The market certainly was expecting the 25-basis point rate
cut. That is what we got," said Michael Arone, Chief Investment
Strategist at State Street Global Advisors in Boston. "The
reaction of the markets today and rates suggest investors are
concluding, rightly or wrongly, that the Fed is close to being
done with their cuts."
Hopes of a rate cut and recent optimism around the trade
talks had helped lift the benchmark S&P 500 to record intraday
highs in the previous two sessions.
The Dow Jones Industrial Average .DJI rose 12.73 points,
or 0.05%, to 27,084.15, the S&P 500 .SPX lost 1.23 points, or
0.04%, to 3,035.66 and the Nasdaq Composite .IXIC dropped 3.71
points, or 0.04%, to 8,273.14.
The interest-rate sensitive banking sub-sector .SPXBK
pared losses after the statement, but was still down 0.69%.
Utilities .SPLRCU , up 0.43%, was the best performing while the
energy sector .SPNY lagged, down 2.12%.
Investors also dealt with the latest round of corporate
earnings. Shares of General Electric Co GE.N jumped 9.20%
after the industrial conglomerate beat quarterly profit
estimates and raised its cash forecast for the year.
Yum Brands Inc YUM.N shed 7.04% and was among the top
decliners on the benchmark index as the KFC owner missed
quarterly profit expectations.
U.S. economic growth slowed less than expected in the third
quarter, a Commerce Department report showed, as declining
business investment was offset by resilient consumer spending
and a rebound in exports, further allaying financial market
fears of a recession. Other data showed a modest acceleration in private sector
job growth, boosted by gains in the service sector, according to
the ADP National Employment Report. The data comes ahead of
Friday's payrolls report.
About 74.1% of the 278 S&P 500 companies that have reported
so far have beaten profit estimates, according to Refinitiv
data.
However, profit growth forecasts for the next four quarters
have been revised lower, even as expectations for the decline in
third quarter earnings has shrunk to 1.6%, compared with a 2.2%
fall at the start of the month.
Shares of tech heavyweight Apple Inc AAPL.O and social
media giant Facebook Inc FB.O fell ahead of their earnings
reports due after the bell. They were the biggest drags on the
Nasdaq.
Buoying the Dow was a 2.47% rise in shares of Johnson &
Johnson JNJ.N . The company said 15 new tests found no asbestos
in a bottle of baby powder that the U.S. Food and Drug
Administration says tested positive for trace amounts of
asbestos. FDA said it stands by its finding. Mattel Inc MAT.O surged nearly 12.55% after the U.S.
toymaker reported a surprise jump in quarterly revenue.
Declining issues outnumbered advancing ones on the NYSE by a
1.35-to-1 ratio; on Nasdaq, a 1.42-to-1 ratio favored decliners.
The S&P 500 posted 11 new 52-week highs and 4 new lows; the
Nasdaq Composite recorded 50 new highs and 64 new lows.
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The S&P 500 and Fed interest rate decisions https://tmsnrt.rs/2oA9uII
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