US stocks rose to new highs on Wednesday after the US Federal
Reserve recommitted to an accommodative monetary policy and raised
its outlook for the nation's economy.
Following a two day policy meeting, Fed Chair Janet Yellen
announced that the bank saw short-term interest rates improving
through 2016, but saw reduced growth in the long run.
Yellen cited an improving labor market and lower household debt
as reasons to expect faster growth over the next two years.
The bank also met expectations and continued with its tapering
schedule by reducing its monthly asset purchases by a further $10
billion, proving that the region's economy was gaining the strength
needed to stand on its own.
In other news around the markets:
On Wednesday, a chain of emails between
employee Laura Andres and the company's engineers indicated that
the company ignored warnings from 2005 about the ignition switch
problem. Andres noticed the problem when her own Chevrolet Impala
shut off after hitting a bump and alerted engineers of her concern.
However, her complaint fell on deaf ears as the company only just
recalled those vehicles this week. With Iraq on the verge of a
civil war, the White House is pushing for the nation to create a
new government that would include representation from both the
Sunni and Kurdish communities as the nation's current Shiite leader
Prime Minister Nouri al-Maliki seems unable to unite the nation's
minority groups. The Obama administration has said that a
government which gives a voice to the minority groups could prevent
them from supporting radical movements like the Islamic state of
Iraq and al-Sham, which is responsible for the latest outbreak of
violence. Although Russian President Vladimir Putin and his
Ukrainian counterpart Petro Poroshenko have been reportedly
discussing a cease fire in eastern Ukraine, the fighting continued
on Thursday as both pro-Russian separatists and the Ukrainian
military clashed near the town of Krasny Liman. Reuters reported
that military sources have said the scale of this battle far
exceeds that of any other clash thus far in the conflict. Shares of
lost ground on Wednesday after the company's board announced its
intent to fire Chief Executive and founder Dov Charney. The board
has not yet released the details of the move, but said that Charney
is being accused of "misconduct." Charney's contract obligates the
board to wait for a 30 day period before finalizing the decision.
Asian markets were mixed; the NIKKEI and the KOSPI gained 1.62
percent and 0.13 percent respectively, while the Shenzhen composite
lost 2.33 percent and the Shanghai composite fell 1.55 percent.
European markets were off to a good start; the UK's FTSE gained
0.67 percent, the eurozone's STOXX 600 rose 0.61 percent, Italy's
MIB gained 1.05 percent, the German DAX gained 0.80 percent and the
French CAC 40 rose 0.76 percent.
Energy futures were higher as the crisis in Iraq continued to
worsen, Brent crude oil futures were up to $114.24 per barrel while
WTI traded at $106.21 per barrel. Gold and silver were up 0.65
percent and 0.84 percent respectively and industrial metals also
rose across the board. Copper gained 0.03 percent, zinc was up 0.56
percent, and aluminum had the largest gains, up 1.13 percent.
The euro gained momentum against the dollar following the Fed
meeting, up 0.31 percent. The common currency also rose 0.13
percent against the pound and 0.16 percent against the yen. The
dollar retreated, down 0.14 percent against the yen, 0.19 percent
against the pound and 0.35 percent against the franc.
Notable earnings released on Wednesday included:
) reported fourth quarter EPS of $2.46 on revenue of $11.80
billion, compared to last year's EPS of $2.13 on revenue of $11.44
billion. Red Hat (NYSE:
) reported first quarter EPS of $0.34 on revenue of $424.00
million, compared to last year's EPS of $0.32 on revenue of $363.26
million. Jabil Circuit (NYSE:
) reported a third quarter loss of $0.06 on revenue of $3.79
billion, compared to last year's EPS of $0.56 on revenue of $4.47
billion. Actuant Corporation (NYSE:
) reported third quarter EPS of $0.70 on revenue of $378.19
million, compared to last year's EPS of $0.62 on revenue of $344.20
Stocks moving in the Premarket included:
) gained 0.41 percent in premarket trade after rising 0.11 percent
on Wednesday. Transocean Ltd. (NYSE:
) was down 0.49 percent in premarket trade after rising 2.56
percent over the past five days. Microsoft (NASDAQ:
) fell 0.41 percent in premarket trade after gaining 2.64 percent
over the past week. Facebook (NASDAQ:
) was down 0.35 percent in premarket trade after rising 1.86
percent on Wednesday.
Notable earnings expected on Thursday include:
Kroger Company (NYSE:
) is expected to report first quarter EPS of $1.05 on revenue of
$32.57 billion, compared to last year's EPS of $0.92 on revenue of
$30.04 billion. Oracle Corporation (NYSE:
) is expected to report fourth quarter EPS of $0.95 on revenue of
$11.48 billion, compared to last year's EPS of $0.87 on revenue of
$10.95 billion. BlackBerry (NASDAQ:
) is expected to report a first quarter loss of $0.25 on revenue of
$969.56 million, compared to last year's loss of $0.13 on revenue
of $3.07 billion. Rite Aid (NYSE:
) is expected to report first quarter EPS of $0.05 on revenue of
$6.43 billion, compared to last year's EPS of $0.09 on revenue of
Thursday's economic calendar will be relatively quiet with
notable releases including US initial and continuing jobless
claims, British retail sales, and the US CB leading index.
For a recap of Wednesday's market action, click .
Tune into Benzinga's #PreMarket Prep today to hear Jeff Pierce,
Meisa Bonelli and Rev. Emmanuel Lemelson
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