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Markets Try to Reverse Losing Streak

September 26, 2013 by

The stock market rose on Thursday after positive data about the job market was released, with the Standard Poor’s 500-stock index and the Dow Jones industrial average snapping five-day losing streaks.

But the gains were limited as investors continued to worry whether Washington lawmakers would manage to avoid a government shutdown and a possible federal debt default.

Initial claims for unemployment benefits dropped last week near a six-year low, the Labor Department said, a development that could bode well for employers adding workers to their payrolls. The encouraging data on jobless claims comes just over a week before September’s employment report is due.

“If today’s number was a good number, that means when we see the job report on Oct. 4, that number ought to be pretty strong,” said Philip Orlando, chief equity market strategist at Federated Investors.

The Dow industrials rose 55.04 points, or 0.4 percent, to close at 15,328.30. The S. P. 500 gained 5.90 points, or 0.4 percent, to 1,698.67. The Nasdaq composite index picked up 26.33 points, or 0.70 percent, to 3,787.43.

Among notable gainers on the Nasdaq, Bed Bath Beyond rose $3.32, or 4.5 percent, to $77.54, a day after it reported a jump in its second-quarter profit.

After the closing bell, shares of Nike jumped $4.36, or 6.2 percent, to $74.70 after it reported a profit that exceeded analysts’ estimates. This was the first earnings report for the retailer as a member of the Dow. The stock ended the regular session up 2.1 percent at $70.34.

In the bond market, interest rates inched higher. The price of the Treasury’s 10-year note slipped 6/32, to 98 23/32, while its yield rose to 2.65 percent, from 2.63 percent late Wednesday.

Article source: http://www.nytimes.com/2013/09/27/business/daily-stock-market-activity.html?partner=rss&emc=rss

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In Surprise, Fed Decides to Maintain Pace of Stimulus

September 18, 2013 by

All summer, Federal Reserve officials said flattering things about the economy’s performance: how strong it looked, how well it was recovering, how eager they were to step back and watch it walk on its own.

But, in a reversal that stunned economists and investors on Wall Street, the Fed said on Wednesday that it would postpone any retreat from its monetary stimulus campaign for at least another month and quite possibly until next year. The Fed’s chairman, Ben S. Bernanke, emphasized that economic conditions were improving. But he said that the Fed still feared a turn for the worse.

He noted that Congressional Republicans and the White House were hurtling toward an impasse over government spending. That was reinforced on Wednesday, when House leaders said they would seek to pass a federal budget stripping all financing for President Obama’s signature health care law, increasing the chances of a government shutdown.

And the Fed undermined its own efforts when it declared in June that it intended to begin a retreat by the end of the year, causing investors to immediately begin to demand higher interest rates on mortgage loans and other financial products, a trend that the Fed said Wednesday was threatening to slow the economy.

“We have been overoptimistic,” Mr. Bernanke said at a news conference Wednesday. The Fed, he said, is “avoiding a tightening until we can be comfortable that the economy is in fact growing the way that we want it to be growing.”

Investors cheered the Fed’s hesitation. The Standard Poor’s 500 stock-index rose 1.22 percent, to close at a record high, in nominal terms. Interest rates also fell; the yield on the benchmark 10-year Treasury reversed some of its recent rise.

Some analysts, however, warned that the unexpected announcement was likely to worsen confusion about the Fed’s plans, increasing the volatility of the markets in the coming months as investors sort through the Fed’s mixed messages about how much longer it plans to continue its bond-buying campaign. The delay also means that the decision to retreat may ultimately be made by the next Fed chairman, after Mr. Bernanke steps down at the end of January. President Obama has said that he plans to nominate a replacement as soon as next week. Janet L. Yellen, the Fed’s vice chairman, is the leading candidate.

“The cost of not setting out on a default gradual glide path for completing QE3 today is that this issue is now likely to be front and center in the nomination and confirmation process for the new Fed chair,” wrote Krishna Guha, head of central bank strategy at the financial services firm International Strategy Investment, referring to the Fed’s asset purchases of quantitative easing.

The Fed unrolled an aggressive combination of new policies last year in an effort to encourage a housing recovery and increase the pace of job creation. It started adding $85 billion a month to its holdings of Treasury securities and mortgage-backed securities, to help keep long-term borrowing costs down and said it planned to keep buying until the outlook for the labor market improved substantially. The Fed also said it would keep short-term rates near zero for even longer — at least as long as the unemployment rate remained above 6.5 percent.

Half a year later, in June, Mr. Bernanke surprised many investors by announcing that the Fed intended to start cutting back on those asset purchases by the end of 2013. Fed officials reiterated that intention in July, and several officials had since suggested that the Fed might begin to pull back at the September meeting. It is also scheduled to meet next month and in mid-December.

Some critics question the Fed’s assessment of the economy, in particular its claim that a declining unemployment rate is a sign of progress. They note that unemployment is falling in part because fewer people are looking for work, and therefore are no longer officially counted as unemployed.

Jack Ewing contributed reporting from Frankfurt.

Article source: http://www.nytimes.com/2013/09/19/business/economy/fed-in-surprise-move-postpones-retreat-from-stimulus-campaign.html?partner=rss&emc=rss

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Markets Rise as Traders Weigh Employment Data

September 5, 2013 by

Stocks on Wall Street edged higher on Thursday, putting equities on track for a third consecutive session of gains, as a flurry of economic data pointed to improving economic conditions.

Gains were limited, however, with many investors reluctant to make big bets going into Friday’s payroll report, and with the prospect of a Western-led strike against Syria still uncertain.

In afternoon trading, the Standard Poor’s 500-stock index was 0.2 percent higher, the Dow Jones industrial average also gained 0.2 percent and the Nasdaq composite was 0.3 percent higher.

While the data was positive, it did little to alter investor speculation about when the United States Federal Reserve might begin to ease its accommodative monetary policies, credited with spurring the equity market’s gains in 2013.

“Equities are stuck right now, and there won’t be conviction for buyers or sellers until we get more clarity,” said Todd M. Schoenberger, managing partner at LandColt Capital in New York.

The ADP National Employment Report showed that private employers added 176,000 jobs in August, nearly matching expectations for a gain of 180,000 jobs, while weekly initial jobless claims fell more than expected to a seasonally adjusted 323,000.

Separately, the Institute for Supply Management’s read on the services sector rose more than expected in August, while factory orders fell less than had been anticipated.

European shares ended the day higher, with the FTSEurofirst 300 index up 0.5 percent, and Asian markets closed mostly higher, helped by the Bank of Japan’s decision to continue its stimulus program.

In a positive sign of near-term upward momentum, the S. P. 500 closed above its 100-day moving average for the first time since Aug. 26 on Wednesday. It also closed above its 14-day moving average for the first time since Aug. 8.

After falling 3.1 percent in August, its worst monthly performance since May 2012, the S. P. 500 has kicked off September with a 1.5 percent advance thus far.

Market movement has recently been driven by the likelihood of a Western-led strike against Syria in retaliation for a possible chemical weapons attack against civilians; on Wednesday, the Senate Foreign Relations Committee backed a resolution supporting a strike.

Investors have been especially focused on any possible effect on oil supplies. Benchmark crude oil rose 0.8 percent, to $107.99 a barrel, extending its gains over the last two weeks.

“Until we have clear certainty on what will happen, it will be hard for the market to focus on anything but Syria for long,” Mr. Schoenberger said. “Will a war impact what the Fed does? Should we expect oil to go to $140? This is the big issue investors have.”

On Friday, the Labor Department will release its closely watched report on nonfarm payrolls for August.

“We’ve got a wait-and-see attitude ahead of the data, which isn’t surprising given the terrific day we had yesterday,” said Art Hogan, managing director at Lazard Capital Markets in New York. “While I’m not expecting any big moves ahead of tomorrow’s data, it is a positive that we’re not giving up any of our recent gains right now.”

The European Central Bank left its benchmark interest rate unchanged at a record low on Thursday, a decision that had been expected after recent economic indicators showed the euro zone economy was beginning to recover, albeit weakly.

Mario Draghi, the bank’s president, repeated that the central bank expected to keep its key rates “at present or lower levels” for an extended period, citing only “tentative signs” of economic improvement and a return of confidence in the euro zone.

Similarly, the Bank of England said it would keep its benchmark interest rate unchanged at a record low of 0.5 percent.

Ahead of the start of the Group of 20 summit meeting, Russia and China warned that an end to the Fed’s stimulus program could have a negative effect on the global economy.

The yield on a benchmark 10-year Treasury note was down slightly, to 2.94 percent. Analysts said the rout in Treasuries in recent months could persist.

Retail stocks will be in focus as many stores will report their August sales data. Costco Wholesale reported same-store sales that beat expectations despite lower fuel prices; its shares rose 2 percent.

Astex Pharmaceuticals rose 2.5 percent after Otsuka Pharmaceutical agreed to buy the company for $886 million.

Microsoft said late on Wednesday that a jury had decided in its favor in the second of two trials in federal court concerning Motorola Mobility’s licensing of so-called standard, essential patents used in Microsoft products. Shares of Microsoft, a component of the Dow average, were up 0.5 percent.

Boeing raised its 20-year outlook for the Chinese airplane market by 6 percent, citing growing demand for single-aisle and small, wide-body planes as travel in the Asia-Pacific region has surged. Its shares rose 0.2 percent.

Article source: http://www.nytimes.com/2013/09/06/business/daily-stock-market-activity.html?partner=rss&emc=rss

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Another Day of Slight Movement on Wall Street as Investors Weigh Data

July 25, 2013 by Leave a Comment

Gains in energy and chemical companies helped nudge the stock market higher on Thursday.

The modest move extends a pattern this week: even with plenty of earnings news from big companies, the broader market has shuffled between minor gains and minor losses.

Cabot Oil and Gas and Range Resources reported revenue and earnings that trumped estimates, sending their stocks up 7 percent. Cabot rose $4.85 to $76.56. Range Resources rose $5.34 to $81.39.

Facebook soared 30 percent after reporting earnings late on Wednesday that easily beat analysts’ forecasts, thanks to higher revenue from advertisements on mobile devices. Facebook’s stock gained $7.85 to $34.36.

Nearly halfway through the second-quarter earnings season, the overall trend looks good, but not great, said Tyler Vernon, chief investment officer of Biltmore Capital in Princeton, N.J. “There have been some big disappointments, like Caterpillar yesterday, but we’re seeing better and better numbers coming out.”

The Standard Poor’s 500-stock index gained 4.31 points, or 0.3 percent, to close at 1,690.25.

The Dow Jones industrial average rose 13.37 points, or 0.1 percent, to 15,555.61. The Dow was held back by Home Depot and Caterpillar, which warned on Wednesday that its sales could sag.

The Nasdaq composite index gained 25.59 points, or 0.7 percent, to 3,605.19.

Analysts forecast that companies in the S. P. 500 index would report earnings growth of 4.3 percent over the same period last year, according to SP Capital IQ. At the beginning of July, the forecast was for growth of 2.8 percent. More than six out of every 10 companies have cleared analysts’ earnings targets so far.

Improving profits should help push the S. P. 500 index above 1,700 in the coming weeks, Mr. Vernon said.

D. R. Horton Inc., the country’s largest builder, and PulteGroup said orders for new houses jumped in the second quarter, but their results still fell short of what analysts had expected. PulteGroup also posted a 14 percent decline in profits.

D. R. Horton dropped $1.82, or 9 percent, to $19.38. PulteGroup lost $1.90, or 10 percent, to $16.55, the biggest drop of any stock in the S. P. 500.

“I think what you’re seeing a bit of today is people questioning what higher mortgage rates mean for housing,” said Joe Kinahan, chief strategist at TD Ameritrade in Chicago.

In the market for United States government bonds, benchmark 10-year Treasury note rose 2/32, to 92 28/32. Its yield was unchanged from late Wednesday at 2.58 percent. Late last week, it was trading at 2.48 percent.

The 10-year yield acts as a benchmark rate for most mortgage loans. A sharp increase in the rate drives up mortgage costs and could slow down sales in the housing market.

It is still very low by historical standards, thanks in large part to the Federal Reserve’s bond-buying program. The 10-year Treasury yield hit a recent low of 1.63 percent on May 3. By contrast, it was trading around 4 percent in the summer of 2008, shortly before the worst days of the financial crisis.

The Russell 2000 index of small-company stocks set another record high, gaining 10.35 points, or 1 percent, to 1,054.18. The Russell has done better than other major indexes this year, gaining 24 percent versus 19 percent for the S. P. 500 and the Dow.

Article source: http://www.nytimes.com/2013/07/26/business/daily-stock-market-activity.html?partner=rss&emc=rss

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Wall Street Indexes Close Mixed

July 23, 2013 by Leave a Comment

The Standard Poor’s 500-stock index hit an intraday record high on Tuesday before slipping in a tight-range session, while the Dow Jones industrials got a lift from upbeat earnings.

By the end of trading, the S. P. was 0.2 percent lower, the Dow Jones industrial average gained 0.1 percent and the Nasdaq composite was down 0.6 percent.

The S. P.’s decline was only its second down day in the last 14 for the benchmark index. The SP 500 has gained about 19 percent for the year.

“Valuations are decent, there’s positive monetary pressure, earnings are just O.K.” said John Manley, chief equity strategist at Wells Fargo Funds Management in New York. “It’s hard to get people excited but the market keeps grinding higher.”

“It will be slow over the summer, but the market will have an upward bias,” he said.

Shares of United Technologies, the world’s largest maker of elevators and air conditioners, led the Dow’s advance after the company raised the low end of its 2013 earnings forecast. The stock was up 3 percent.

The Dow also reached an intraday record high shortly after the opening bell, within a few minutes of the SP 500’s jump to its record intraday high.

Asian markets rose after local media outlets in China reported that the government was looking to increase investment in railroad projects to reduce gluts in steel, cement and other materials as it aimed to ensure annual economic growth did not sink below 7 percent.

The reports lifted stocks across Asia outside Japan by 1.3 percent, to their highest levels since early June. They also gave an early increase to mining stocks in London, although a lack of detail made some in the markets cautious.

A flurry of merger and acquisition activity and a sharp rally in telecommunications shares added to gains across Europe in morning trade, but by the end of the session, the FTSEurofirst 300 index was 0.2 percent lower.

Among declining shares in the United States, the online-entertainment company Netflix fell 4.5 percent, a day after it reported that its show “Arrested Development” had lured new subscribers in the second quarter — but not enough to impress investors.

United Parcel Service posted a smaller quarterly profit as customers chose slower, cheaper shipping services, especially on international routes. Its shares were 0.1 percent lower.

Benchmark crude oil in the United States gained 17 cents, to $107.11 a barrel. Investors are awaiting United States crude inventory data for further clues about the outlook for demand.

Article source: http://www.nytimes.com/2013/07/24/business/daily-stock-market-activity.html?partner=rss&emc=rss

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McDonald’s Falls Short, Restraining Market’s Rally

July 22, 2013 by Leave a Comment

The stock market edged higher on Monday, although disappointing McDonald’s earnings kept the Dow Jones industrial average from making any significant gains.

Banks and health shares were the day’s best performers; financial stocks advanced for the 10th time in the last 12 sessions. Bank of America led the group, while the American-listed shares of UBS rose 60 cents, or 3.22 percent, to $19.24, after the Swiss bank’s second-quarter profit exceeded forecasts.

Analysts said the market would probably trend higher in the absence of any weak economic news, but it would need strong earnings and positive forecasts to post large gains.

“Most earnings have been good, maybe not great but good, and as a consequence I think investors continue to show that equities is the asset class of choice for them right now,” said Richard Meckler, president of LibertyView Capital Management.

Weaker-than-expected results from the fast-food company McDonald’s weighed on the Dow after it said its full-year results would be “challenged” by falling sales in Europe. McDonald’s shares lost $2.69, or 2.68 percent, to $97.58.

The Dow Jones industrial average gained 1.81 points, or 0.01 percent, to 15,545.55.

The Standard Poor’s 500-stock index reached another nominal closing record high, rising 3.44 points, or 0.2 percent, to 1,695.53.

The Nasdaq composite index added 12.77 points, or 0.36 percent, to 3,600.39.

The S. P. 500 has advanced nearly 19 percent so far this year.

Nearly one-third of S. P. 500 companies are expected to report earnings this week, including Apple on Tuesday. Of the 109 companies in the S. P. 500 that have reported earnings for the quarter, 64.2 percent have exceeded analysts’ expectations, while fewer than half have topped revenue estimates.

In the bond market, interest rates were stable. The price of the Treasury’s 10-year note was unchanged at 93 21/32, while its yield remained at 2.48 percent.

Article source: http://www.nytimes.com/2013/07/23/business/daily-stock-market-activity.html?partner=rss&emc=rss

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Market Rises for Fourth Straight Day on Hope Earnings Will Exceed Forecasts

July 9, 2013 by Leave a Comment

The stock market rose for a fourth straight session on Tuesday as investors seemed optimistic that companies would be able to surpass relatively low forecasts for the earnings season, possibly prolonging the rally.

The recent move higher has taken the Standard Poor’s 500-stock index close to its nominal high, reached in May, and the Nasdaq composite index to its highest point since November 2000.

The market’s gains also suggest that investors are becoming more comfortable with the prospect of the Federal Reserve slowing its economic stimulus, which has been a major driver of the stock rally this year.

For the most part, analysts are expecting second-quarter results to be soft with weak sales, but expectations are for a pickup later in the year. Even so, investors are starting to suggest earnings expectations may have been too low.

“We think we have the potential once again for an earnings season where expectations are a little too low, and when the earnings finally do come out, we could have a little bit of an upside surprise,” said Ryan Detrick, senior technical strategist at Schaeffer’s Investment Research.

Analysts predict earnings at S. P. 500 companies will grow 2.9 percent in the second quarter from a year earlier, well below the 6.1 percent that was forecast in April, according to Thomson Reuters.

Forecasts for growth in the first quarter were similarly revised lower to as little as 1.5 percent. The earnings season beat that with growth of 5.4 percent.

The Dow Jones industrial average gained 75.65 points on Tuesday, or 0.50 percent, to end at 15,300.34. The S. P. 500 rose 11.86 points, or 0.72 percent, to 1,652.32, just 1 percent below its record closing high of 1.669.16 on May 21. The Nasdaq climbed 19.43 points, or 0.56 percent, to close at 3,504.26.

Analysts “have lowered the expectations enough that even if the numbers aren’t materially better, the outlooks will be more favorable than what is the consensus now,” said Alan B. Lancz, president of Alan B. Lancz Associates.

The earnings calendar remains light until Friday when JPMorgan Chase and Wells Fargo are set to report results.

Volatility has plunged in recent weeks on waning worries that the Federal Reserve was moving to reduce its $85 billion a month in bond purchases, which aim to stimulate the economy. The market volatility index, or VIX, Wall Street’s main indicator of investor fear, has tumbled more than 30 percent since late June. On Tuesday, it fell 2.9 percent to end at 14.35.

“It almost seems like the market is starting to get more comfortable with the fact that the Fed could taper,” Mr. Detrick said.

“We’re in a different area from where we would have been five or six weeks ago, where strong economic data was met with selling,” he said. “Now good news is actually being perceived as good news.”

The Fed will release the minutes from its June policy meeting on Wednesday afternoon, possibly providing clues into the timing of a possible reduction of stimulus measures.

Among the stocks on the move, FedEx climbed $4.32, or 4.4 percent, to $103.15 on speculation that the billionaire hedge fund manager William Ackman would make a big investment.

Health Management Associates jumped $1.28, or 8.3 percent, to $16.75 after a report that it had attracted takeover interest from Community Health Systems and other rivals.

Intuitive Surgical shares plunged $80.78, or 16.2 percent, to $419.30 after it said it expected second-quarter revenue below analysts’ expectations.

In the bond market, interest rates were stable. The price of the Treasury’s 10-year note was stable at 92 11/32 and its yield was stable at 2.64 percent.

Article source: http://www.nytimes.com/2013/07/10/business/daily-stock-market-activity.html?partner=rss&emc=rss

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Stocks Rise on Earnings Optimism

July 9, 2013 by Leave a Comment

Stocks rose on Tuesday, putting Wall Street on pace for a fourth consecutive advance, after Alcoa reported higher-than-expected adjusted profit, which buoyed optimism about quarterly earnings reports to come.

In afternoon trading, the Standard Poor’s 500-stock index gained 0.7 percent, the Dow Jones industrial average rose 0.5 percent and the Nasdaq composite was 0.5 percent higher.

Global markets were also higher, with the FTSEurofirst 300 index of European shares closing 0.8 percent higher; Japan’s Nikkei average ended its session almost 2.6 percent higher, near a six-week high.

Alcoa, the first Dow component to report results for the second quarter, also said late on Monday that it anticipated solid growth in global demand for its products this year. Shares of Alcoa, the largest American aluminum producer, rose at the opening bell before falling 0.4 percent.

The earnings report bolstered confidence for an earnings season currently forecast to show lackluster growth.

“We’ve set the expectations bar extremely low, probably the lowest that we’ve seen in the last eight quarters, for this earnings season,” said Art Hogan, managing director at Lazard Capital Markets in New York. “So if we are going to get some upside surprises here, which I entirely expect that we will, the market may react positively.”

The earnings calendar remains fairly light this week until Friday, when JPMorgan Chase and Wells Fargo are scheduled to report.

The benchmark S.P. 500 has risen 1.6 percent over the last three sessions, as jobs and manufacturing data have helped ease concerns over the possible early pullback of stimulus measures by the Federal Reserve.

“What is more important here is that we’ve got a market that has transitioned in psychology – good news is actually good news, and that is a very important transition in the market psychology right now,” said Mr. Hogan.

The book retailer Barnes Noble gained 4 percent after the company’s chief executive, William Lynch Jr., resigned.

Tesla Motors, which makes electric cars, gained 2.4 percent after Nasdaq OMX Group said Tesla would replace Oracle on the Nasdaq 100 stock index, reflecting the company’s rising profile.

The grocery store operator Kroger Company said it would acquire Harris Teeter Supermarkets in a deal valued at $2.5 billion, including debt, to expand in Southeast and Middle Atlantic states. Kroger shares rose 2.5 percent, and Harris Teeter gained 1.6 percent.

Article source: http://www.nytimes.com/2013/07/10/business/daily-stock-market-activity.html?partner=rss&emc=rss

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Optimistic Fed Outlines an End to Its Stimulus

June 19, 2013 by Leave a Comment

Mr. Bernanke, offering new details, said the central bank intends to scale down gradually its monthly purchases of Treasury securities and mortgage-backed bonds beginning later this year and ending when the unemployment rate hits 7 percent, which the Fed expects to happen by the middle of next year.

The central bank would then take several more years to unwind the rest of its extraordinary stimulus campaign, slowly raising short-term interest rates from essentially zero to more normal levels after the jobless rate has fallen to 6.5 percent or lower.

He emphasized, however, that the timing of the retreat depends on the health of the economy; if growth falters, the central bank would slow, or even reverse, the process. The expectations of Fed officials for the next several years, published Wednesday, are more optimistic than the consensus of private forecasters.

Pulling back “would basically say that we’ve had a relatively decent economic outcome in terms of sustained improvement in growth and unemployment,” Mr. Bernanke said. “If things are worse, we will do more. If things are better, we will do less.”

Mr. Bernanke’s comments, which followed a two-day meeting of the Fed’s policy-making committee, appeared to disappoint investors on Wall Street who had hoped that the central bank would do more for longer. Stocks fell, with the broad Standard Poor’s 500-stock index dropping 1.39 percent; interest rates rose.

The impact on the economy will take longer to judge. The Fed’s goal is to pull back as the economy gains strength so its departure is barely felt, like a parent who lets go of a bike at the moment a child is ready to ride. But the Fed has removed its hands too soon several times in recent years. On the other side of the equation, the central bank, at some point, runs the risk of pushing too hard for too long, which can also cause crashes.

Gennadiy Goldberg, an analyst at TD Securities, described the market’s reaction as “emblematic of the lumpy path toward normalization,” illustrating the limits of the Fed’s ability to control the way that the economy will respond to its retreat.

The housing market is an example. The Fed, deciding last year that it needed to do more, began to buy mortgage bonds in an effort to drive down borrowing costs. The lower rates spurred a wave of refinancing and home buying. But now, as the recovery gains momentum and the Fed signals that it plans to pull back, interest rates are beginning to rise and mortgage refinancing is beginning to wane.

Mr. Bernanke said on Wednesday that the rate increases were a “good thing,” a sign that the economy is returning to health.

But Ian Shepherdson, chief economist at Pantheon Macroeconomics, said the Fed still runs the risk of withdrawing its extra support for the economy too soon.

“Later in the cycle, we will be happy to take that view too,” Mr. Shepherdson wrote Wednesday. “But not now, and it is very odd coming from a Fed chairman who has placed so much emphasis on the role of housing in the recovery. We do not think the market is yet ready to absorb higher rates.”

The Fed, in a statement released after the meeting of the Federal Open Market Committee, sounded notes of increased optimism about the economy, but unusually, the statement did not describe the bond-buying timeline. Mr. Bernanke said he had been “deputized” to share the details at the news conference.

The statement said that the economy was expanding “at a moderate pace” and that the job market was improving. Most significantly, it noted that risks to growth had “diminished since last fall,” an important assertion because the Fed has been trying in part to shield the economy from the consequences of reductions in federal spending. Those consequences have been milder than expected.

Article source: http://www.nytimes.com/2013/06/20/business/economy/fed-more-optimistic-about-economy-maintains-bond-buying.html?partner=rss&emc=rss

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Wall Street Ends Lower on Central Bank Fears

June 11, 2013 by Leave a Comment

Stocks slumped on Tuesday after the Bank of Japan declined to take additional stimulus measures, a move that increased investors’ worries about the eventual decline in central bank support that has bolstered an equities rally.

At the end of Wall Street trading, the Standard Poor’s 500-stock index was down 1 percent in afternoon trading, the Dow Jones industrial average was off 0.8 percent and the Nasdaq composite was 1 percent lower.

The Bank of Japan kept monetary policy steady at the end of its two-day meeting, holding off on taking fresh steps to calm bond market volatility. Unhappy traders sent the Nikkei down 1.5 percent.

The lack of additional action rattled investors, underscoring worries about what would happen when the stimulus programs eventually go away. At the same time, nervousness remains over when the Federal Reserve may slow its measures, which have been a significant driver of this year’s stock market rally.

“This market has been fed by extremely supportive government policies around the world,” said Richard Meckler, president of the investment firm LibertyView Capital Management in Jersey City. “You’re getting to that period where investors have to recognize that these policies are beginning to wrap up.”

In Europe, the broad FTSE Eurofirst 300 index of top shares, which has shed 5 percent in the previous 12 trading sessions, ended Tuesday’s session 1.2 percent lower.

But United States Treasury prices turned higher on Tuesday, as the benchmark 10-year Treasury note, erasing a modest loss, was up 6/32 to yield 2.19 percent. The 30-year Treasury extended a gain to 24/32, allowing its yield to ease to 3.33 percent.

Shares of Lululemon Athletica slumped more than 17 percent after the company’s chief executive said she would step down.

SoftBank said it would raise its offer for Sprint Nextel to $21.6 billion from $20.1 billion. Sprint was up 2.4 percent.

The S.P. 500 is up more than 15 percent since the start of the year, but markets have been bumpier since comments from the Fed chairman, Ben S. Bernanke, last month sparked uncertainty over the central bank’s timeline for slowing its $85 billion a month bond purchase program.

While the Bank of Japan left the door open to taking fresh steps to calm markets if borrowing costs spiked again, it did not appear to assuage investors. “The B.O.J. took some big steps and had some big changes but now that they’ve done that, the market is looking for even more,” Mr. Meckler said.

Seasonality was also playing a part in Tuesday’s weakness as equities tend to have less direction in the summer months, he said.

Shares in the Dole Food Company rose 22 percent after Dole received an unsolicited buyout offer from its chief executive.

The Catamaran Corporation climbed 11 percent after it signed a 10-year agreement with the Cigna Corporation.

Boeing raised its 20-year forecast for demand, saying airlines will need 35,280 new airplanes worth $4.8 trillion as the world’s fleet doubles. Boeing shares fell 0.5 percent.

The yen extended its rally after the Bank of Japan’s lack of action, and the dollar traded as low as 95.68 yen for a 3 percent loss on the day.

The euro briefly traded above $1.33, but gains were pared headed into Europe’s stock market close, with the euro last trading at $1.3274, up 0.1 percent on the day.

In the debt market, investors pulled out of the riskiest assets, sending Greek 10-year bond yields up 75 basis points, to 10.22 percent. Portuguese equivalent bonds rose 34 basis points, to 6.59 percent.

The Greek government has failed to find buyers for its state-owned natural gas company, threatening the privatization goal set under the country’s bailout.

Article source: http://www.nytimes.com/2013/06/12/business/daily-stock-market-activity.html?partner=rss&emc=rss

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