By Geoffrey Smith
Investing.com -- U.S. stock markets opened higher on Wednesday but for most stocks it was a case of 'wait-and-see' while the Federal Reserve winds up its latest policy meeting.
The Fed is expected by many to say when it will start reducing its monthly bond purchases, which have run at $120 billion since the first wave of the pandemic. The market's reaction is likely to be determined by when the Fed starts to 'taper' the purchases, and how long it wants the phasing-out period to be. Attention will also be on the Fed's so-called 'dot plot', to see whether policymakers have accelerated the timeline for future interest rate hikes.
Support came from China, where a vaguely-worded statement from real estate developer China Evergrande put off what many consider to be an unavoidable default by saying it had reached an agreement with holders of an onshore bond on which interest is due on Thursday. It made no mention of other upcoming debt repayments.
There was also an indication of sustained strength in the housing market, with a 4.9% weekly rise in mortgage applications. Existing home sales data for August are due at 10 AM ET.
By 9:35 AM ET (1335 GMT), the Dow Jones Industrial Average was up 201 points, or 0.6%, at 34,121 points. The S&P 500 was up 0.4% and the Nasdaq Composite was up 0.2%.
While the broader market movement was upward, the most notable single-stock movements were generally in the other direction, as earnings updates continued to feed a growing narrative of slowing growth and higher costs that will squeeze profitability. FedEx (NYSE:FDX) stock fell 7.5% after it warned of higher costs ahead, while Adobe (NASDAQ:ADBE) stock fell 4.6% after its quarterly update - while beating expectations, still pointed to a fading of the pandemic-driven growth impulse of the last year and a half.
Facebook (NASDAQ:FB) stock fell 2.7% after a series of Wall Street Journal articles detailing its governance shortcomings continued to weigh on it. The stock has fallen nearly 7% since the first of the articles in the series. The company also repeated on Wednesday that changes to Apple's iOS system are hurting its advertising business. Apple (NASDAQ:AAPL) stock rose 0.5%.
DraftKings (NASDAQ:DKNG) stock fell another 1.2%, after dropping more than 7% on Tuesday to its lowest in a month on the back of an expensive-looking bid for U.K.-based Entain (OTC:GMVHY). Draftkings sweetened its initial offer, but Entain's board said overnight in London only that it would 'seriously consider' the bid.
On a more positive note, Stitch Fix (NASDAQ:SFIX) stock rose 16% as the company returned to profit in its fiscal fourth quarter, while Uber (NYSE:UBER) stock extended the gains it made on Tuesday after forecasting its first-ever adjusted EBITDA profit. The stock rose 3.9% to its highest in nearly two months.