The US Federal Reserve meeting ended with the bank pledging to
continue with its $85 billion per month stimulus plan until
economic data paints a more stable picture of the US economy.
The news sent markets soaring; treasury bonds had their largest
price rally in a single day since November 2011, with 10-year
yields closing at 2.706 percent. The Dow Jones closed at an all
time high, up 0.9 percent, and the S&P 500 index was up 20.76
points, a new record.
In other news around the markets:
With one year left for the European banking rescue program,
eurozone banks are beginning to push for a new plan that will
continue to ease the pain of the region's financial crisis. The
European Central Bank has lent about one trillion euros into the
region's banks, but as the maturity for those loans approaches many
worry that banks in struggling countries like Italy and Spain will
fail if left to stand on their own. Now, banks are lobbying for
another round of ECB loans in 2014, before the original loans
mature in 2015. The SEC has proposed a new rule that would require
companies to disclose the gap between employee salaries and chief
executives' pay. Republican lawmakers and some regulators have
criticized the rule, saying that those details don't provide
information about a company's financial health and simply shame
chief executives. Bank of Japan member Takahide Kiuchi made a
statement on Thursday saying the country was not in need of further
stimulus at the moment. He said that the planned sales tax hike is
not expected to have a huge impact on the Japanese economy in the
long term, and that the bank will consider further easing only if
the economy is affected by a severe shock. Sharp Corp announced on
Wednesday that it was planning to raise up to $1.67 billion through
a share issuance and investments from its business partners. Over
the past year, Sharp has dealt with shaky finances, and the new
funds are expected to help ease some of the pressure on its balance
sheet. The additional cash has been earmarked for investment in new
facilities in Asia, liquid-crystal displays for smartphones and
research and development for growth segments like robotics and
Asian markets were up on Thursday; the NIKKEI gained 1.80
percent and the Hang Seng index was up 1.67 percent. The
Indonesia's JSX composite had the largest gains, up 4.93 percent
and New Zealand's NZ50 and Australia's ASX 200 grew by 1.05 percent
and 1.10 percent respectively.
European markets benefited from the Fed's decision to maintain
its stimulus. The UK's FTSE was up 1.38 percent and the STOXX 600
was up 1.11 percent. France's CAC 40 was up 1.21 percent, the
German DAX grew 1.27 percent and the Spanish IBEX gained 1.19
Commodity markets were on a high with news of the continued Fed
stimulus. Brent futures were up 0.07 percent and WTI futures gained
0.51 percent. Gold jumped 4.91 percent to $1,317.80 per ounce and
silver gained 7.17 percent to $23.11 per ounce. Industrial metals
were also up across the board, copper gained 1.83 percent and
aluminum was up 0.42 percent.
The dollar sunk against the euro losing 0.30 percent, but gained
0.97 percent against the yen and 0.37 percent against the pound.
The dollar also lost 2.54 percent to the rupee.
Notable companies that reported earnings on Wednesday
Oracle Corporation (NASDAQ:
) reported EPS of $0.59 on revenue of $3.38 billion, compared to
last year's EPS of $0.53 on revenue of $8.21 billion. FedEx
) reported EPS of $1.53 on revenue of $11.00 billion, compared to
last year's EPS of $1.45 on revenue of $10.79 billion. General
Mills, Inc. (NYSE:
) reported EPS of $0.70 on revenue of $4.37 billion, compared to
last year's EPS of $0.66 on revenue of $4.05 billion.
Stocks moving in the pre-market included:
Procter & Gamble Co (NYSE:
) continued its upward climb and gained 0.60 percent in pre-market
trade on Thursday. Berkshire Hathaway Inc (NYSE:
) benefited from the Fed's decision and gained 0.39 percent in
pre-market trade National Oilwell Varco Inc (NYSE:
) lost 10.39 percent in pre-market trade after gaining nearly a
percentage point over the past five days. Oracle Corporation
) lost 2.30 in pre-market trade after its earnings report showed an
8 percent rise in profit and a weak outlook. Verizon Communication
) was down 0.84 percent in pre-market trade after complaints about
connectivity to the company's high-speed LTE network.
Notable companies expected to report earnings on Thursday
ConAgra Foods, Inc. (NYSE:
) is expected to report EPS of $0.45 on revenue of $4.38 billion,
compared to last year's EPS of $0.44 on revenue of $3.31 billion.
IHS Inc. (NYSE:
) is expected to report EPS of $1.18 on revenue of $468.48 million,
compared to last year's EPS of $0.99 on revenue of $385.61 million.
Pier 1 Imports, Inc. (NYSE:
) is expected to report EPS of $0.21 on revenue of $404.23 million,
compared to last year's EPS of $0.19 on revenue of $367.62 million.
Rite Aid Corporation (NYSE:
) is expected to report a loss of $0.04 per share on revenue of
$6.27 billion, compared to last year's loss of $0.05 per share on
revenue of $6.23 billion.
Economic releases on Thursday include initial and continuing
jobless claims, existing home sales, and current account data from
the US, British retail sales and the Swiss National Bank's interest
Good luck with your mid week trades!
For a recap of Wednesday's market action, click
Tune into Benzinga's pre-market info show with Dennis Dick and
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