Stock Market News for February 19, 2010 - Market News
U.S. stocks closed higher for a third straight session as an increase in regional manufacturing helped offset concerns about unemployment and disappointing sales at Wal-Mart. The retailer’s cautious forecast failed to deter investors from building positions as better-than-expected earnings reports continued to pour in.
However, in a surprise move, the Federal Reserve announced after the close that it was raising the interest rate it charges banks for emergency loans. Although the central bank noted the move did not reflect a change in policy and reflected an improving economy, sentiments turned jittery sending stock futures lower after the close. Market participants were of the view that the Fed was preparing the ground for withdrawing some of the emergency economic support.
St Louis Fed President Bullard's attempt to play down the Fed’s surprise announcement by terming the move part of a “normalization process" and that speculation of an imminent interest rate hike was “overblown," failed to garner much support. The Fed increased the discount rate by 0.25 basis points to 0.75%.
This morning’s stock futures suggest stocks would open in the red. Global stock markets fell today after the Fed’s announcement last evening. Dow Jones industrial average futures fell 40, or 0.4%, to 10,335. Standard & Poor's 500 index futures are off 6.30, or 0.6%, to 1,099.30, while Nasdaq 100 index futures fell 6.25, or 0.3%, to 1,814.50.
The Dow Jones industrial average advanced 83.66 points, or 0.8%, to 10,392.90. The broader Standard & Poor's 500 index rose 7.24 points, or 0.7%, to 1,106.75 and the tech-heavy Nasdaq composite index rose 15.42 points, or 0.7%, to 2,241.71, its fifth straight session gain. More than two stocks rose for every one that fell on the New York Stock Exchange.
Wal-Mart (NYSE:WMT), which reported better-than-expected earnings results, fell 1.1% after reporting a 1.6% drop in same-store-sales that missed. The retailer warned the company is likely to continue to struggle in the current tough economic conditions. Hewlett-Packard (NYSE:HPQ), however, beat both earnings and revenue projections, raising its sales outlook for 2010 ahead of consensus expectations. The shares rose 1.4%
Among earnings reports slated for release today are interims from: JC Penney (NYSE:JCP), PG&E (NYSE:PCG), and Pinnacle West Capital (NYSE:PNW).
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