By Barbara Kollmeyer and Carla Mozee, MarketWatch
AT&T shares drop, Time-Warner, Fox shares soar after court
ruling
U.S. stock-market indexes were tentatively higher on Wednesday
as investors awaited a decision from the Federal Reserve, which is
widely expected to increase rates by a quarter of a percentage
point and offer details on path forward for monetary policy.
What did are markets doing?
The S&P 500 rose 4 points, or 0.2%, to 2,791, with six of
the 11 main sectors trading lower. Telecoms shares were among the
worst hit, with the sector down more than 3% after Tuesday's court
ruling
(http://www.marketwatch.com/story/att-wins-antitrust-ruling-to-acquire-time-warner-2018-06-12)
that AT&T can go ahead with its nearly $85 billion acquisition
of Time Warner.
The Nasdaq Compositeadded 42 points, or 0.5%, to 7,746 and set
an intraday record at 7,747.16.
The Dow Jones Industrial Average edged 22 points, or 0.1%, to
25,340.
Wednesday's muted moves follow a pattern of small gains amid low
volatility. The Cboe Volatility Index is trading at about 12, near
its lowest levels of the year.
The Russell 2000 index of small-cap stocks , which closed at an
all-time high, was up fractionally.
Read: Fund managers are overweight U.S. stocks for first time in
15 months
(http://www.marketwatch.com/story/stock-market-investors-just-fell-back-in-love-with-america-survey-2018-06-12)
What's driving the market?
While investors continue to monitor any potential fallout from
the meeting between President Donald Trump and North Korean leader
Kim Jong Un, attention moved squarely toward the conclusion of the
Fed's two-day meeting on Wednesday.
A statement from the central bank is due at 2 p.m. Eastern Time,
followed by a press conference with Chairman Jerome Powell at 2:30
p.m. Eastern.
Investors have priced in expectations that the Fed will lift the
federal-funds rate to a range between 1.75% to 2%, from 1.5% to
1.75%, marking the second rate hike this year and the seventh move
since the start of the tightening cycle in December of 2015.
Read:Five questions likely to be fired at Fed's Powell on
Wednesday
(http://www.marketwatch.com/story/5-challenging-questions-fed-chief-powell-may-encounter-2018-06-12)
Also:Fed goal is to signal an 'unhurried' pace of interest-rate
hikes
(http://www.marketwatch.com/story/feds-goal-is-to-signal-an-unhurried-pace-of-interest-rate-hikes-2018-06-08)
Looking ahead, European Central Bank policy makers are expected
on Thursday to announce the timing for unwinding bond buying, while
the Bank of Japan will release its policy decision on Friday.
A measure of wholesale inflation jumped 0.5% in May
(http://www.marketwatch.com/story/wholesale-inflation-surges-in-may-due-to-higher-oil-prices-ppi-show-2018-06-13),
against the backdrop of rising oil prices, adding upward pressure
on inflation in a steadily growing economy marked by supply
bottlenecks and a growing shortages of skilled labor.
Check out: How stock investors can profit from this week's Fed
meeting
(http://www.marketwatch.com/story/how-stock-investors-can-profit-from-this-weeks-fed-meeting-2018-06-12)
What are strategists saying?
"The Fed has telegraphed its rate decision so well, that very
few people expect any surprises," said Shannon Sacoccia, chief
investment officer at Boston Private Wealth.
"So far there has been very little negative reaction to the
strong jobs report and inflation data, which suggests that
investors don't expect the Fed to be aggressive. Of course, any
sign of hawkishness in the statement could hit the market,"
Saccocia said.
"The immediate market reaction [to the Fed] is likely to colored
by whether the median forecast in the dot plot moves to four hikes
this year. We think it will, but would caution against reading too
much into this measure which is always prone to discrete jumps,"
said Adam Cole, chief currency strategist at RBC Capital Markets,
in a note.
"We don't anticipate dramatic changes in the characterization of
economic growth or inflation in the press statement," Cole
added.
What stocks could be active?
H&R Block Inc.(HRB) shares plunged 19%, adding to sharp loss
late Tuesday even as the tax-preparation company posted a
first-quarter earnings beat and lifted its dividend
(http://www.marketwatch.com/story/hr-block-shares-plunge-14-after-companys-q1-results-2018-06-12).
Shares of AT&T Inc.(T) lost 4.7%, while Time Warner
Inc.(TWX) jumped 3% after Tuesday's court ruling
(http://www.marketwatch.com/story/att-wins-antitrust-ruling-to-acquire-time-warner-2018-06-12)
that AT&T can go ahead with its nearly $85 billion acquisition
of Time Warner.
While telecom stocks reacted negatively, media companies saw
their stocks jump.
And 21st Century Fox Inc.(FOXA) surged 7%, as that ruling will
likely give the media group the go-ahead to sell some of its TV and
movie assets. Fox has agreed to a $52.4 billion all-stock deal with
Walt Disney Co.(DIS), whose shares slipped 1.4%. However, rival
Comcast Corp.(CMCSA) is expected announce a rival bid $60 billion
all-cash bid
(http://www.marketwatch.com/story/potential-comcast-fox-deal-awaits-tuesdays-ruling-on-att-time-warner-merger-2018-06-10)
as soon as Wednesday. Comcast shares fell 3.5%.
Pivotal Software Inc.(PVTL) shares jumped 5% after the
cloud-software company issued an earnings beat
(http://www.marketwatch.com/story/pivotal-software-shines-in-post-ipo-earnings-report-2018-06-12)
in its first report since an April initial public offering. Chief
Executive Officer Rob Mee told MarketWatch in an interview that the
company is focused on subscription revenue.
What are other markets doing?
(http://www.marketwatch.com/story/asian-markets-wait-and-see-as-trump-kim-meet-2018-06-11)The
ICE U.S. Dollar Index , which measures the buck against six rivals,
was off by 0.1% at 93.747.
Asian stocks were mixed, while European stocks started to find
slightly higher footing.
Crude-oil futures were moving lower, with July West Texas
Intermediate crude down 0.6% at $65.94. Gold futures
(http://www.marketwatch.com/story/gold-prices-slip-in-wake-of-trump-kim-pact-as-attention-fixes-on-interest-rates-2018-06-12)slipped
0.1% to $1,297.60 an ounce, after tapping a high near $1,305 during
the session.
(END) Dow Jones Newswires
June 13, 2018 11:36 ET (15:36 GMT)
Copyright (c) 2018 Dow Jones & Company, Inc.