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US close: Stocks jump after Fed pledges to keep rates low
Tue, 22 May, 2012
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US close: Stocks jump after Fed pledges to keep rates low
Wed, 25 Jan 2012, 22:58:00
Dow: +83 at 12,759. Nasdaq: +83 at 12,759. S&P 500: +11 at 1,326. In spite of a poor start, US stocks surged after the Federal Reserve announced that interest rates would stay low for some time yet. Meanwhile, Apple's impressive performance helped lift the Nasdaq Composite index stay in the blue all day, while the other benchmarks opened lower. The Fed, which had previously said it would maintain the federal funds rate between 0% and 0.25% until mid-2013, announced today that it intends to leave them as they are until late 2014. According to the Federal Open Market Committee (FOMC), "economic conditions - including low rates of resource utilization and a subdued outlook for inflation over the medium run - are likely to warrant exceptionally low levels for the federal funds rate at least through late 2014." While the move fuelled buying on Wall Street today, some noted that the decision reflected the central bank's concerns over economic growth: one economist from RBC Capital Markets (Tom Porcelli) was quoted as saying that "this drives home one important fact, the Fed is scared." Barclays Capital analyst Troy Davig said: "In terms of the projection materials to be released prior to the press conference, we expect the majority of participants [in the FOMC] to report their expected date of the first rate hike is 2014, although today's the dovish tone of today's statement suggests that more of the participants' initial rate hike projection may be in 2015 or later than we previously expected."
APPLE IMPRESSES EVERYONE IN Q1
The big news on the Street today - other than the FOMC statement of course - was tech giant
Apple
whose first quarter earnings smashed expectations on both the revenue and profit levels. Apple was helped higher in mid-morning trade after Goldman Sachs labelled the stock as under-priced. The US investment bank noted that Apple, normally a company inclined to under-promise and over-deliver, has raised earnings guidance for the second quarter to a level above the consensus view of analysts covering the stock. Goldman reiterated its "buy" recommendation and raised its 12-month target price to $600 from $550. Shares finished the day up 6%. Elsewhere,
Illumina
surged nearly 50% after Swiss pharmaceutical giant Roche Holding made a $5.7bn offer for US company, an 18% premium over its closing price on Tuesday. The offer is unsolicited after several failed attempts to negotiate the deal, reports The Wall Street Journal Shares in oil company
ConocoPhillips
fell in spite of its fourth quarter earnings topping analysts' estimates. Earnings per share came in at $2.02, easily topping the consensus estimate of $1.79. Investors in industrial technology firm
United Technologies
also seemed underwhelmed after the group reported a better-than-expected 10.5% earnings growth for the fourth quarter due to greater sales for its Otis elevators and at its airplane unit Hamilton Sundstrand. Aerospace giant
Boeing
was one stock not joining in with the party after its full-year earnings guidance fell short of expectations. Shares in DVD rental firm
Netflix
rocketed after the closing bell after its fourth quarter revenue jumped 47% to beat expectations.
MACROECONOMY
Pending home sales fell by 3.5% on the month in December. BC
S&P 500 - Risers
Textron Inc. (TXT) $24.76 +14.58% CA Inc. (CA) $25.03 +9.68% AK Steel Holding Corp. (AKS) $10.04 +8.07% Apple Inc. (AAPL) $446.66 +6.24% Bemis Co. Inc. (BMS) $31.79 +6.00% CF Industries Holdings Inc. (CF) $181.06 +5.05% NRG Energy Inc. (NRG) $17.33 +5.03% United States Steel Corp. (X) $30.40 +4.97% Newmont Mining Corp. (NEM) $60.25 +4.82% Freeport-McMoRan Copper & Gold Inc. (FCX) $46.08 +4.80%
S&P 500 - Fallers
Corning Inc. (GLW) $13.05 -10.74% Xerox Corp. (XRX) $7.81 -9.92% Motorola Solutions Inc (MSI) $44.94 -6.10% Hess Corp. (HES) $57.31 -4.99% WellPoint Inc. (WLP) $66.10 -4.76% W.W. Grainger Inc. (GWW) $195.17 -4.10% Lincoln National Corp. (LNC) $21.94 -4.02% Tellabs Inc. (TLAB) $4.21 -3.66% State Street Corp. (STT) $39.91 -3.39% Molex Inc. (MOLX) $26.52 -3.32%
Dow Jones I.A - Risers
Caterpillar Inc. (CAT) $109.05 +2.60% E.I. du Pont de Nemours and Co. (DD) $50.59 +2.39% Alcoa Inc. (AA) $10.48 +2.04% Travelers Company Inc. (TRV) $59.15 +1.98% American Express Co. (AXP) $50.17 +1.91% General Electric Co. (GE) $19.13 +1.54% Chevron Corp. (CVX) $107.73 +0.95% Bank of America Corp. (BAC) $7.35 +0.82% Walt Disney Co. (DIS) $39.56 +0.79% Coca-Cola Co. (KO) $68.43 +0.78%
Dow Jones I.A - Fallers
Hewlett-Packard Co. (HPQ) $28.17 -1.23% Verizon Communications Inc. (VZ) $37.69 -0.26% Merck & Co. Inc. (MRK) $38.68 -0.26% United Technologies Corp. (UTX) $77.65 -0.17% JP Morgan Chase & Co. (JPM) $37.60 -0.16% International Business Machines Corp. (IBM) $191.75 -0.09%
Nasdaq 100 - Risers
Illumina Inc. (ILMN) $55.15 +46.34% CA Inc. (CA) $25.03 +9.68% Research in Motion Ltd. (RIMM) $16.29 +8.53% Qiagen N.V. (QGEN) $16.77 +6.85% Apple Inc. (AAPL) $446.66 +6.24% Nll Holdings Inc. (NIHD) $19.98 +5.57% Life Technologies Corp. (LIFE) $49.09 +3.76% Intuitive Surgical Inc. (ISRG) $455.66 +3.56% Urban Outfitters Inc. (URBN) $27.54 +3.48% Baidu Inc. (BIDU) $125.03 +2.69%
Nasdaq 100 - Fallers
Activision Blizzard Inc. (ATVI) $11.95 -2.69% Sears Holdings Corp. (SHLD) $44.87 -1.99% Google Inc. (GOOG) $569.49 -1.97% News Corp. Class A (NWSA) $18.78 -1.52% Xilinx Inc. (XLNX) $35.52 -1.50% Microchip Technology Inc. (MCHP) $36.79 -1.39% Maxim Integrated Products Inc. (MXIM) $27.56 -0.86% Yahoo! Inc. (YHOO) $15.56 -0.83% Nvidia Corp. (NVDA) $14.85 -0.60% Flextronics International Ltd. (FLEX) $6.76 -0.59%
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