Traders work on the floor at the New York Stock Exchange (NYSE) in New York, U.S., January 10, 2020.
Brendan McDermid | Reuters
This is a live blog. Check back for updates.
10:31 am: How the Fed will fight the next downturn – ‘large-scale asset purchases’
Powell says Fed must use forward guidance, purchases in future downturn. “Our traditional tool, of course, is interest rates. And low rates are not really a choice anymore: They are a fact of reality. So we will have less room to cut. That means it’s much more likely that we’ll have to turn to the tools that we used in the financial crisis when we hit the lower bound. Which is forward guidance – which says it will keep rates low – and then it’s also large-scale asset purchases of longer-term securities to drive longer-term rates down and support the economy. We will use those tools, I believe we will use them aggressively should the need arise to do so. There’s no need to do that now. But we will use those tools aggressively. — Franck
10:21 am: Powell calls addressing inequality ‘an important national priority’
Federal Reserve Chairman Jerome Powell offered his take on income inequality, saying addressing the issue should be “an important national priority” as the economic expansion continues. “It’s been a particularly good time to be at the top end of the income spectrum,” the central bank chief told members of the Senate Banking Committee. “This is not our self-image as a country. It’s something we need to address.” Powell noted that mobility, or the chances of moving from lower income strata to the upper levels, is low now, due at least in part to a workforce not well enough equipped to handle the increasing technical nature of jobs. “We want, of course, prosperity to be broadly shared. It comes down to really education and training that enables people to do well in the modern economy, which is a globalized economy that is less about manufacturing. Manufacturing jobs are more technical than what they were. We need a workforce that can benefit from technology and globalization,” he said. – Cox
10:01 am: Dow reaches high of the day, up 250
The Dow has hit a new high for the session and a new all-time high, up more than 250 points to 29,535.98. Credit a turnaround in Apple shares and gains in Cisco, which reports after the bell. Powell has not said anything with a market impact so far. -Melloy
9:49 am: Powell has begun his testimony before the Senate
Follow this blog for any comments from the Fed chief that impacts markets.
9:31 am: Dow jumps 200 points to a record high
The Dow Jones Industrial Average climbed 202 points at the open, hitting a new all-time high, as investors shrugged off fears around the coronavirus. Big industrial names Dow.Inc and Caterpillar were the biggest winners in the 30-stock index, gaining 2% each. The S&P 500 rose 0.5%, headed for its third consecutive day of gains. — Li
9:23 am: Oil jumps 2.5% on easing coronavirus fears, production cut hopes
Oil prices jumped more than 2% on Wednesday as China reported the lowest daily number of new coronavirus cases since late January, easing concerns about a drop off in demand for oil. Prices also got a boost as traders hope for deeper production cuts from OPEC, after the cartel said Wednesday that worldwide demand for oil will be 230,000 barrels per day less than previously thought thanks to the coronavirus. U.S. West Texas Intermediate crude rose 2.4% to trade at $51.16, while international benchmark Brent crude gained 3% to trade at $55.62. Both contracts, however, are still trading in bear market territory. —Stevens
9:03 am: Here are Wednesday’s biggest analyst calls of the day
8:36 am: Shopify rises following strong fourth quarter results.
Shares of Shopify gained more than 9% in premarket trading after the e-commerce company beat expectations for the fourth quarter and projected higher than expected revenue for 2020. The company reported 43 cents in adjusted earnings per share and $505.2 million in revenue, with its subscriptions solutions segment growing by 37%. Analysts expected 24 cents in earnings per share and $482.1 million in revenue, according to Refinitiv. The company also said it expects revenues to be between $2.13 billion and $2.16 billion in 2020, about 35% higher than last year. Wall Street expected guidance of $2.12 billion, according to FactSet. —Pound
8:35 am: Sentiment readings bouncing back
The percentage of bullish investors has bounced back to where it was before the coronavirus outbreak rattled the market, Peter Boockvar of Bleakley Advisory Group said in a note. Boockvar was citing data from Investors Intelligence. “Bottom line, after seeing extreme bull readings in a variety of metrics literally days before the virus outbreak, the pullback in stocks rung some of that optimism out but it’s coming back rather quickly. Buy on the dip remains firmly embedded in the mentality of the investor as we know,” Boockvar wrote. —Pound
8:32 am: Wynn, Las Vegas Sands jump on Bank of America upgrade
Shares of Wynn Resorts and Las Vegas Sands popped 3.2% and 2.2%, respectively, in premarket trading on Wednesday after Bank of America upgraded the casino stocks to buy from neutral. The firm said the casino companies, which have been hit from heightened fear about the Chinese coronavirus, will rebound as the number of virus cases meaningfully deadline. This is a reversal for Bank of America, which last month downgraded Wynn Resorts due to fear about the virus. The firm said the next catalyst for the stocks will be the reopening of casinos in Macao, which government officials closed for 15 days. —Fitzgerald
8:30 am: Micron jump 3% as UBS says stock can rally 31%
Shares of chipmaker Micron rose nearly 3% in the premarket after UBS updated them to a buy. “As cyclical concerns evaporate, structural dynamics should carry the day,” the analysts said. The firm also lifted its target on the stock to $75 per share from $47 per share, which is 31% higher than where it closed Tuesday. UBS also raised its full-year estimates on Micron, saying it has “closed the gap with other major semiconductor companies.” Shares of Micron have rallied 41% over the last year. —Stevens
8:27 am: CVS gains more than 2%
Shares of CVS Health rose nearly 3% in Wednesday’s premarket trading after the company’s fourth-quarter earnings topped analyst expectations on the top and bottom line. Adjusted earnings per share came in at $1.73 while revenue rose to $66.9 billion. Consensus estimates were for $1.68 per share in earnings and $63.97 billion, respectively, according to Refinitiv. Same-store sales rose 3.2% during the quarter, while sales in the pharmacy unit grew 4.1%. In September, a federal judge signed off on the company’s $69 billion merger with insurer Aetna, which CVS has said will lead to double-digit growth. —Stevens
8:23 am: Powell slated to testify before the Senate at 9:30 am ET
Federal Reserve Chairman Jerome Powell is scheduled to return to Capitol Hill on Wednesday for a second day of testimony on monetary policy, the economy and financial statutes. The Senate Banking Committee hearing is set to begin at 9:30 a.m. ET and include Powell’s already-published prepared remarks before a Q&A session. In his testimony before the House Financial Services Committee on Tuesday, Powell said that the current, low level of interest rates is appropriate given tame inflation, low unemployment and modest economic growth. But he cautioned that low interest rates, while a positive for business borrowing, could hamstring the Fed’s ability to stimulate the economy in the event of a future downturn. —Franck
8:21 am: Bed Bath & Beyond plummets 25% on disappointing guidance
Shares of Bed Bath & Beyond tanked 25% during Wednesday’s premarket trading after the company said that same-stores sales in December and January fell 5.4%. The company said that sales were hurt by additional promotions, inventory issues and falling store traffic. “We are experiencing short-term pain in our efforts to stabilize the business, including the pressures of store traffic trends coupled with our own executional challenges,” CEO Mark Tritton said. Shares of the retailer gained more than 50% in 2019, but are down 14% so far this year. —Stevens