Benchmarks soared on Wednesday primarily boosted by the
encouraging minutes from the central bank's policy meeting. Fed
officials are said to be in favor of hiking rates only when they
are sure about the economic recovery. Alcoa's positive quarterly
numbers boosted its share price, somewhat driving the broader
market as well.
For a look at the issues currently facing the markets, make sure
to read today's
Ahead of Wall Street
The Dow Jones Industrial Average (DJI) gained 1.1% to close
Wednesday's trading session at 16,437.18. The Standard & Poor
(S&P 500) too rose 1.1% to finish at 1,872.18. The tech-laden
Nasdaq Composite Index went up 1.7% to 4,183.90. The fear-gauge
CBOE Volatility Index (VIX) plunged 7.2% to settle at 13.82.
Total volume for the day was roughly 6.3 billion shares, lower
than this month's average of 6.9 billion. Declining stocks were
outnumbered by advancing stocks on the NYSE. For 26% stocks that
declined, 71% advanced.
Benchmarks were positively impacted after minutes from the
Federal Open Market Committee's (FOMC) March meeting indicated
that the central bank may not hike the key lending rates in the
first half of 2015. The central bank also opined that the 6.5%
unemployment rate target to determine interest rate hike is
The latest minutes from the Federal Open Market Committee's March
meeting also stated that measured tapering is likely to continue
for some time.
The Federal Open Market Committee decided in its March policy
meeting to 'modestly' reduce the pace of its bond purchase
program. Also, in that meeting the central bank agreed to trim
purchase of its U.S. Treasuries and mortgage-backed securities by
another $10 billion starting April. This will bring the
bond-buyback program to $55 billion.
Previously, Federal Reserve Chairwoman Janet Yellen had commented
that the economic stimulus program may end this fall and the key
lending rates will then be raised six months later. The central
bank also mentioned that it will rely on a 'wide range of
information' on jobs as well as inflation and not just the
unemployment rate while deciding on raising interest rates.
However, a week later Yellen allayed concerns about the
possibility of a sooner-than-expected hike in interest rates. In
her first public speech at a conference in Chicago, she said that
the central bank's "extraordinary" commitment to support the
economy is required for "some time to come".
Coming back to yesterday's events, shares of aluminum maker Alcoa
) rose 3.8%. Alcoa officially kicked-off the earning season by
announcing their first-quarter earnings results. The earnings per
share (EPS) of 9 cents topped the Zacks Consensus Estimate of 5
Bargain-hunting investors bought technology stocks. Internet
Information Provider stocks from the Technology sector such as
Facebook, Inc. (NASDAQ:
), LinkedIn Corporation (NYSE:
), Yahoo! Inc. (NASDAQ:
) and Google Inc. (NASDAQ:
) surged 7.3%, 4.2%, 3.1% and 1.7%, respectively. Overall, the
Technology Select Sector SPDR (XLK) rose 1.3%.
Investors also bought bio-tech stocks. Shares of bio-tech
companies such as Biogen Idec Inc. (NASDAQ:
), Gilead Sciences Inc. (NASDAQ:
), Vertex Pharmaceuticals Incorporated (NASDAQ:
), Amgen Inc. (NASDAQ:
) and Celgene Corporation (NASDAQ:
) soared 5.2%, 0.9%, 7.0%, 1.7% and 6.6%, respectively. The
Health Care Select Sector SPDR (XLV) led the advance among the
S&P 500 sectors. The sector increased 2.1%. Overall, 9 out of
10 sectors of the S&P 500 ended in the green.
Separately, investors showed interest in high-growth stocks.
Shares of momentum companies such as Boston Scientific
), The Priceline Group Inc. (NASDAQ:
), Red Hat, Inc. (NYSE:
Financial Corporation (NASDAQ:
) rose 4.9%, 3.9%, 4.1% and 6.0%, respectively.
Wednesday's economic data had little impact on the markets. The
U.S. Department of Commerce announced that the US wholesale
inventories rose 0.5% in February after it rose 0.8% in January.
This rise in wholesale inventories in February was in line with
the consensus estimate of a rise of 0.5%.
ALCOA INC (AA): Free Stock Analysis Report
AMGEN INC (AMGN): Free Stock Analysis Report
BIOGEN IDEC INC (BIIB): Free Stock Analysis
BOSTON SCIENTIF (BSX): Free Stock Analysis
CELGENE CORP (CELG): Free Stock Analysis
E TRADE FINL CP (ETFC): Free Stock Analysis
FACEBOOK INC-A (FB): Free Stock Analysis
GILEAD SCIENCES (GILD): Free Stock Analysis
PRICELINE.COM (PCLN): Free Stock Analysis
RED HAT INC (RHT): Free Stock Analysis Report
VERTEX PHARM (VRTX): Free Stock Analysis
YAHOO! INC (YHOO): Free Stock Analysis Report
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