The major stock indexes rose after the Fed cut interest rates by a quarter point, as expected. Small-cap stocks lagged Wednesday, while the rest of the market saw only mild losses.
The Federal Reserve made its cut to the fed funds rate, and suggested it may be done cutting rates for now.
The Nasdaq composite and S&P 500 erased small losses and traded a fraction higher after the Fed's 2 p.m. announcement. The Dow Jones Industrial Average climbed 0.1%. Volume was tracking higher on the NYSE and lower on the Nasdaq compared with the same time on Tuesday.
The Russell 2000 gave back 0.7%, forming a soft patch in today's market. The small-cap benchmark was up 3.5% this month before today's drop, beating the S&P 500's 2% monthly increase. In the context of the Russell's productive October, today's decline seems normal. Among small caps, energy stocks were the weakest.
As badly as small caps performed, they weren't the worst index. The Dow transports slid 2.1%. IShares Transportation Average ETF (IYT) skidded 2.1%.
Trucking stocks were broadly lower after Saia (SAIA) — the leading stock in the industry — plummeted 12% in heavy trade and dropped below its 50-day moving average. The less-than-truckload carrier missed profit expectations, posting EPS of $1.25 a share, up 17%, on a 10% increase in sales to $468.9 million.
Saia has been busy expanding and relocating terminals, and executives said that strategy posed a challenge in the third quarter. Also, "continuing negative weight per shipment trends provided a larger than expected headwind to results," said President and Chief Operating Officer Fritz Holzgrefe. The company says its terminal expansions, including a new one at the busy port of Long Beach, Calif., leave it in a good spot for future growth.
Logistics Stocks Also Lower
IBD's logistics industry group was one of Wednesday's poorest. C.H. Robinson Worldwide (CHRW) plunged to a two-year low after earnings declined and missed estimates.
Bank of America downgraded C.H. Robinson to underperform from neutral and reduced the target price to 80 from 89. BofA also cut XPO Logistics (XPO) to neutral from buy and cut the price target to 76 from 87. XPO shares fell 3%.
C.H. Robinson CEO Bob Biesterfeld said excess industry capacity and softening demand made for difficult comparisons vs. strong revenue growth in the second half of 2018. "Our results were negatively impacted by truckload margin compression in North America," he said.
The selling spread to airfreight and shipping. Those groups were down more than 2%. FedEx (FDX) lost nearly 2%, though its chart isn't changed much from a long downward trend.
Despite the sell-off in trucking, truck maker Oshkosh (OSK) surged past the 86.55 buy point of a cup base. Oshkosh beat profit and revenue expectations.
In other sectors, Huron Consulting (HURN) broke out of a flat base after earnings topped views. Japanese consumer electronics giant Sony (SNE) broke out of a flat base with a 60.84 buy point.
KBR Inc. (KBR) broke out of a double-bottom base. Shares gapped up past the 26.73 buy point in big volume after the company beat Q3 estimates.
Innovator IBD 50 (FFTY) was down 0.4% in early afternoon trading. SolarEdge (SEDG) cost the IBD 50 a good chunk after shares slid 8% to the 50-day moving average. Solar stocks were among Wednesday's worst performing.
The group was down 5% after Enphase Energy (ENPH) gapped down sharply following the company's earnings report. Daqo New Energy (DQ) fell 7% and dropped below the 200-day line.
