The U.S. stock market traded higher on Wednesday after a rocky
start to the week on account of a banking crisis in Cyprus.
A rise in the euro versus the greenback and a decision from
the FOMC to continue with its bond buying program helped
stimulate risk appetite on the day.
The central bank said that it will continue buying $85 billion
in mortgage-backed securities and Treasuries per month in order
to stimulate the economy.
The Dow Jones Industrial Average climbed 54 points, or 0.37
percent, to 14,510.
The S&P 500 rose better than 10 points, or 0.67 percent,
The Nasdaq Composite gained 25 points, or 0.78 percent, to
FOMC Rate Decision
As expected, the Federal Reserve kept its key benchmark
interest rate at 0.25 percent. The central bank continues to hold
rates near zero in an effort to stimulate the economy. An
increase in interest rates is not expected this year.
The Fed also said that it will continue with its $85 billion
per month bond buying program despite a pick up in the
Crude oil prices rose along with stocks on Wednesday. Late in
the day, NYMEX crude futures had risen 0.87 percent to $92.96.
Brent crude futures were last up 1.32 percent to $108.86. Natural
gas fell on the day and was last down 0.53 percent to $3.95.
Precious metals were down slightly on the day. At last check,
COMEX gold futures had lost 0.32 percent to $1,606.20 while
silver was down 0.15 percent to $28.80. Copper futures registered
a gain of better than 1 percent on the session.
In the grains complex, most contracts were higher on
Wednesday. Corn climbed better than 0.50 percent and wheat was up
almost 2 percent. Significant movers in soft commodities included
cocoa, orange juice, and cotton.
Cocoa climbed better than 2.50 percent, while orange juice
futures lost more than 3 percent. Cotton was last down better
than 2 percent.
Near the close of equities, the iShares Barclays 20+ Year Bond
) was down around 1 percent to $116.21. The fall in bond prices
pushed yields higher on U.S. government debt.
The yield on the 2-Year Note rose one basis point to 0.25
percent while the 5-Year Note yield rose two basis points to 0.80
The 10-Year Note and 30-Year Bond yields were up five and six
basis points to 1.94 percent and 3.18 percent, respectively.
The U.S. dollar was slightly lower on the day. Near the equity
close, the PowerShares DB US Dollar Index Bullish ETF (NYSE:
), which tracks the performance of the greenback versus a basket
of foreign currencies, had lost 0.22 percent to $22.56.
A rise in the euro helped risk appetite on Wednesday. At last
check, the EUR/USD was trading up 0.65 percent to $1.2945. The
other significant currency mover on the session was the USD/JPY
which jumped 0.90 percent.
Volatility and Volume
The VIX plunged as stocks climbed on Wednesday. The widely
watched measure of market fear lost around 14 percent to 12.37 on
Volume was lighter than normal on the day. Around 95 million
SPDR S&P 500 ETF (NYSE:
) shares traded hands compared to a 3-month daily average of
) surged better than 10 percent after the company released a
bullish Q4 earnings report.
) plunged around 7 percent after the company's fiscal
third-quarter earnings results disappointed investors.
Both Fannie Mae (OTC:
) and Freddie Mac (OTC:
) continued to surge on the day. FNMA added around 38 percent
while FMCC was up 39 percent.
Obagi Medical Products (NASDAQ:
) jumped better than 28 percent after agreeing to be acquired by
Valeant Pharmaceuticals (NYSE:
) lost more than 4 percent after the company's fiscal
third-quarter earnings results.
) climbed around 4 percent after reporting better than expected
fiscal first-quarter financial results.
Francesca's Holdings (NASDAQ:
) was up around 7 percent near the close of trading after its Q4
results topped estimates.
) had climbed around 20 percent near the close after a Seeking
Alpha article suggested that the company's anemia treatment
Omontys could be reinstated within months. The drug was recalled
in February after reports of serious and life-threatening
allergic reactions triggered by its administration.
Home-builder Lennar (NYSE:
) traded up around 5 percent on Wednesday after the company
released its fiscal first-quarter financial results prior to the
Walter Investment Management (NYSE:
) added around 6 percent on the session after the stock plunged
on Tuesday in the wake of the company's quarterly earnings
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