After spending most of the day higher, U.S. equities lost steam late in the day to finish mixed and very near the flatline, as the anxiety surrounding the impact of the spreading coronavirus continued to keep investors on edge. The Fed kept its monetary policy intact, as widely expected, and its statement remained dovish, but Chairman Powell indicated that the coronavirus outbreak will likely cause disruptions in China, as well as globally. Investors were treated to a slew of earnings results on the busiest week for earnings season, as Dow member Apple and former Dow component General Electric gained ground on their results. However, Starbucks and Advanced Micro Devices disappointed the Street to the detriment of their respective shares. In economic news, pending home sales surprised to the downside and mortgage applications rose. Treasury yields were lower and crude oil prices were mixed, while gold and the U.S. dollar advanced modestly. Markets in Europe and Asia finished mostly higher.

The Dow Jones Industrial Average was up 12 points to 28,735, the S&P 500 Index lost 3 points (0.1%) to 3,273 and the Nasdaq Composite advanced 6 points (0.1%) to 9,275. In moderate volume, 826 million shares were traded on the NYSE and 2.2 billion shares changed hands on the NASDAQ. WTI crude oil ticked $0.15 lower to $53.33 per barrel and wholesale gasoline rose $0.03 to $1.54 per gallon. Elsewhere, the Bloomberg gold spot price was up $9.49 to $1,576.66 per ounce, while the Dollar Index—a comparison of the U.S. dollar to six major world currencies—was 0.1% higher at 98.06.

At 2:00 p.m. ET, the Federal Open Market Committee (FOMC) concluded its two-day monetary policy meeting, keeping its target range for the Fed funds rate at 1.50%-1.75% in a unanimous decision, indicating that the level was “appropriate to support sustained expansion of economic activity.” The decision was widely expected. Of note, the FOMC tweaked its statement, noting that the Committee will gear its policy toward “inflation returning to the Committee’s symmetric two-percent objective.” The fine-tuning comes as Members have indicated concern over the inability of prices to rise to its two-percent level. As well, the statement was adjusted to the Committee’s characterization of consumer spending from “strong” in the last release to “moderate.” In addition, the FOMC upped the interest on excess reserves (IOER) by 5 basis points to 1.6% aimed at smoothing out volatility in the money markets. No updated economic projections were released at this meeting.

In his scheduled press conference after the statement, Chairman Powell reiterated the Committee’s commitment to avoid inflation below its two-percent target, signs of global growth have stabilized and uncertainties surrounding trade have diminished. Regarding the coronavirus, Powell said it may likely cause disruptions in China and globally and that the Fed is closely monitoring the outbreak.

The MBA Mortgage Application Index rose by 7.2% last week, following the prior week’s 1.2% decline. The increase came as a 7.5% rise in the Refinance Index was met with a 5.3% gain for the Purchase Index. The average 30-year mortgage rate fell 6 basis points (bps) to 3.81%.

Pending home sales fell 4.9% month-over-month (m/m) in December, versus projections of a 0.5% gain, and following the unrevised 1.2% rise registered in November. Sales were 6.8% higher y/y, compared to the expected 10.3% jump. Pending home sales reflect contract signings and are a gauge of the pipeline of existing home sales.

The advance goods trade balance showed that the December deficit widened more than expected, coming in at $68.3 billion versus estimates of $65.0 billion. November’s deficit was downwardly-revised to $63.0 billion.

Preliminary wholesale inventories dipped 0.1% m/m for December, compared to expectations of a 0.1% increase, and versus November’s upwardly-revised 0.1% gain.

Treasuries were higher, as the yield on the 2-year note decline 4 bps to 1.42%, while the yields on the 10-year note and the 30-year bond fell 5 bps to 1.59% and 2.05%, respectively.

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