U.S. stocks turned slightly higher after the Federal Reserve did exactly what investors expected: Scaling back its support for the economy. Stock indexes edged higher after spending most of the day in the red.
KEEPING SCORE: The Dow Jones industrial average rose eight points, or 0.05 percent, to 16,919 as of 2:16 p.m., shortly after the Fed released its latest policy statement. It was down as much as 95 points in midday trading. The Standard & Poor's 500 index was up five points, or 0.3 percent, to 1,975. The Nasdaq composite rose 26 points, or 0.6 percent, to 4,469.
FOCUS ON THE FED: Federal Reserve policymakers said the central bank would make further cuts to its monthly bond purchases, a program that is intended to keep long-term interest rates low and encourage borrowing and spending. At the current pace of cutbacks, the Fed's bond purchases will end in October.
NEXT STEPS: The Fed restated its intention to keep short-term interest rates low "for a considerable time" after it stops buying bonds. Most economists expect that the Fed could start raising rates next year as the economy improves. The government reported earlier Wednesday that it estimates the economy grew at a relatively robust annual rate of 4 percent this spring.
WHERE'S THE PARTY: A strong report on the economy is always good news for the stock market over the long haul, said Darrell Cronk, Deputy Chief Investment Officer for Wells Fargo Wealth Management. In the near term, though, investors weigh any good news against a possible interest-rate move from the Federal Reserve.
"I'd love to get back to where what matters most for the market is the economy not what the latest read is on the Fed," Cronk said.
EARNINGS PARADE: Wall Street is in the middle of second-quarter earnings season, when big companies turn in their springtime results and tell investors how they think the rest of the year will shape up. Genworth Financial sank $2.09, or 13 percent, to $14.17 and Goodyear Tire & Rubber fell $1.94, or 7 percent, to $25.63 after turning in results that disappointed investors.
NOT BAD OVERALL: So far, the news has been much better than many expected. More than half of the companies in the S&P 500 have turned in results, and roughly seven out of 10 have reported higher profits than analysts projected, according to S&P Capital IQ.
TWEET, TWEET: Stronger revenue from Twitter sent the company's stock up 21 percent in early trading. The social-networking company reported a quarterly loss late Tuesday but its revenue more than doubled over the year, thanks to new advertising tools and a surge in traffic from soccer fans following the World Cup. Twitter's stock surged $8.35 to $46.93.
LAYOFFS AND PROFITS: Amgen said Tuesday that it plans to lay off up to 15 percent of its worldwide workforce and close four sites, even as it reported second-quarter results that trounced Wall Street expectations. The drugmaker also raised its forecasts for its 2014 profit and sales. Amgen's stock climbed $6.22, or 5 percent, to $129.52.
BUSY WEEK: It's a busy week for economic news. Besides the Federal Reserve meeting, there's a report on China's manufacturing industry out Thursday, and the U.S. Labor Department releases its monthly jobs report on Friday.
EUROPE: Major markets in Europe drifted lower. Germany's DAX sank 0.6 percent and France's CAC 40 dropped 1.2 percent. Britain's FTSE 100 lost 0.5 percent.
OTHER MARKETS: News of stronger U.S. economic growth sent prices for U.S. government bonds lower. The yield on the 10-year Treasury note jumped to 2.54 percent from 2.46 percent late Tuesday, a big move in the usually placid bond market. Benchmark U.S. crude for September delivery rose 49 cents to $101.53 a barrel.
___
AP Business Writers Yuri Kageyama contributed from Tokyo and Steve Rothwell contributed from New York.
via Sify.com http://ift.tt/1n3M1kO
Comments
Post a Comment