US stocks slip after the Fed maintains its support of the economy

FILE PHOTO: U.S. Federal Reserve Chairman Jerome Powell speaks to reporters after the Federal Reserve cut interest rates in an emergency move designed to shield the world's largest economy from the impact of the coronavirus, during a news conference in Washington, U.S., March 3, 2020. REUTERS/Kevin Lamarque
  • US stocks were lower Wednesday after the Federal Reserve maintained its support for the economy.
  • Policymakers held the Fed’s benchmark interest rate near zero and maintained the pace of asset purchases of at least $120 billion per month.
  • Google’s parent Alphabet hit a record intraday high after the tech stalwart crushed earnings.
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US stocks closed lower on Wednesday after the Federal Reserve maintained its support for the economy.

The Federal Open Market Committee concluded its two-day April meeting, announcing it would maintain its ultra-accommodative policy stance. The US central bank held the benchmark interest rate near zero and maintained the pace of asset purchases of at least $120 billion per month.

Chairman Jerome Powell also said that widespread vaccination and “strong policy support” have fueled a considerable pick-up in the pace of economic recovery.

“This new-found patience from the market, even in the face of resoundingly strong economic data and rising inflationary pressures is perhaps testament to the Fed’s credibility and the success of Powell’s communication,” said Seema Shah, Principal Global Investors chief strategist. “Investors appear to have accepted – for now, at least – that it is too soon for the Fed to consider tapering and a more persistent overshooting of the 2% inflation target is required before the central bank will even entertain discussion of rate hikes.

She added however, that at some point over the coming months as inflation picks up, the Fed will need to provide “incremental signals” on when the policy unwind will begin.

Here’s where US indexes stood at the 4 p.m. ET close on Wednesday:

Google’s Alphabet Inc. hit a record intraday high after the company posted earnings that beat Wall Street expectations and showed a surge in ad sales. Meanwhile, Microsoft fell to a three-week low after its earnings disappointed. After the closing bell today, Facebook and Apple report earnings. Find a full calendar of this week’s earnings here.

The US Securities and Exchange Commission is considering new guidance to curb growth projections made by listed SPAC, according to Reuters. The reported crackdown comes as the blank-check frenzy that started 2021 cools off. Analysts from JPMorgan today said that the SPAC boom has peaked, and the decline in SPACs since February has been driven by a slowing of retail money flow into stocks.

Ether hit a new all-time high today of $2,740.17, per CoinDesk data. While ether remains far behind bitcoin’s $1 trillion market value, some experts predict that it may not be long before the runner-up dethrones bitcoin as the world’s biggest cryptocurrency.

West Texas Intermediate crude was up 1.6%, to $63.92 per barrel. Brent crude, oil’s international benchmark, rose 1.3%, to $67.29 per barrel.

Gold climbed as much as 0.1%, to $1,780.40 per ounce.

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Google parent Alphabet jumps to record as strong ad sales push 1st-quarter results past Wall Street’s forecasts

Alphabet & Google CEO Sundar Pichai
Alphabet CEO Sundar Pichai.

  • Alphabet shares hit all-time highs Wednesday following first-quarter results that beat expectations.
  • Earnings of $26.29 per share came in higher than the $15.82 per share estimate from Refinitiv.
  • Alphabet also got authorization from its board to repurchase up to an additional $50 billion of its shares.
  • See more stories on Insider’s business page.

Shares of Google parent Alphabet hit record intraday highs on Wednesday after the company posted first-quarter earnings and revenue that beat Wall Street expectations. The tech giant was also authorized by its board to repurchase up to an additional $50 billion of its own stock.

A 34% rise in revenue supported by stronger advertising sales helped the company blow past analyst estimates.

Earnings were $26.29 per share, well above the Refinitiv estimate of $15.82 per share and earnings of $9.87 per share a year earlier.

Total revenue of $55.31 billion was ahead of the $51.70 billion estimate from Refinitiv. A year ago, revenue was $44.16 billion. The increase reflected consumer activity online and broad-based ad revenue growth, the company said.

Traffic acquisition costs came in at $9.71 billion, up from $7.45 billion a year earlier.

The stock climbed as much as 5% to $2,397 per share. It’s gained 31% year-to-date, driven in part by investors expecting the company to benefit from increased use of search services amid the pandemic.

“Over the last year, people have turned to Google Search and many online services to stay informed, connected and entertained. We’ve continued our focus on delivering trusted services to help people around the world,” said Sundar Pichai, Alphabet’s CEO, in a statement.

Revenue from Google Search rose to $31.9 billion from $24.5 billion and YouTube ads drew in $6 billion, up from $4 billion in the prior period.

“We see a permanent shift to digital drawing ever more ad dollars, with particular strength in YouTube as it is the new TV of this decade. Further, we see real momentum across Google as the global economy re-opens in stages and marketing budgets ramp up,” said Brent Thill, an equity analyst at Jefferies, in a note.

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