After yesterday's Fed-induced sugar rush, markets are heading
slightly lower this morning as jobless claims in the US
Yesterday, the Federal Reserve signaled confidence in the economy's
strength, but scaled back stimulus by a small amount. The central
bank will buy $75 billion in bonds and mortgage-backed securities
every month, $10 billion less than it had every month since
September 2012. It also signaled that interest rates will stay very
low for the foreseeable future, as long as the unemployment rate
remains over 6.5%. The market surged on the news, with the
Dow Jones Industrial Average
(INDEXDJX:.DJI) gaining 292.97 points to hit a record high of
Overseas markets are still surging in reaction to the Fed decision,
but US stock index futures are indicating a slightly lower opening.
Dow futures were down 0.06% at 16,100.00 before the opening bell on
(INDEXSP:.INX) futures fell 0.09% to 1,803.00.
(INDEXNASDAQ:.IXIC) futures slipped 0.23% to 3,500.50.
The bond market sold off. The 10-year Treasury yield rose two basis
point to 2.91% now that the Fed will buy fewer bonds every month.
Gold prices are also down. Spot gold fell 2.5% to $1,203.80.
Initial claims for unemployment insurance spiked for a second
straight week. Last week, 379,000 people filed for unemployment, up
by 10,000 from the week before. Economists had expected claims to
fall to 337,000. Later today, the government will report November
existing home sales. The annualized rate of sales is expected to
fall to 5.02 million from 5.12 million.
) shares fell 2.25% today after the company announced a second
offering. The social network will offer 70 million shares in the
offering. CEO Mark Zuckerberg will slightly reduce his voting power
by selling Class A shares, selling $2.3 billion worth of the stock,
but he will gain 60 million Class B shares, which will have 10
times the votes. The CEO's earnings from the sale will mostly go to
the taxes incurred by exercising the option to buy the Class B
shares, but he will also donate $1 billion to a charity. Zuckerberg
will still control 62.8% of the company's voting power, down from
65%. The company itself will sell 23 million shares.
) earnings for the second fiscal quarter were better than expected.
The database software giant reported that earnings per share came
in at $0.69 as revenue rose 2% to $9.3 billion, quelling worries
that companies are scaling back on IT spending. Shares were up 2%
at the time of writing.
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) failed, but Dish is eager to use its valuable rights to the 4G