Stock Market News for April 29, 2010 - Market News
After Tuesday’s drubbing, stocks rebounded and closed with modest gains as the U.S. Federal Reserve’s two-day policy meeting concluded on expected lines. The U.S. central bank’s decision to keep interest rates low for “an extended period" gave markets a much-needed boost after Greece and Portugal’s credit rating downgrades had rattled markets Tuesday.
Meanwhile, Standard & Poor’s downgraded its credit rating on Spain Wednesday, even as European policy makers frantically looked for ways to save Greece from the brink of financial collapse and stave off contagion. However, Germany’s apparent reluctance to fund the bailout unless Athens resorted to further spending cuts added to the uncertainty that has gripped European markets. Nevertheless, the package appears likely to be finalized early next week
The euro, meanwhile, plunged to a fresh low against the dollar after Spain's one-step downgrade to AA on a negative outlook. Reports suggested the three-year, EU/IMF bailout package for Greece could cost as much as $160 billion.
Back home, at the end of a two-day meeting, the Fed’s policymaking arm gave investors what they expected. It left interest rates unchanged while noting the economy is yet to come out of the slack left over by the recession. The bankers noted the labor market is beginning to improve and consumer spending is slowly gaining momentum.
Expectations that the low interest rate regime is likely to be in place for the next three to six months sent banking shares higher, with Goldman Sachs (NYSE:GS) closing up 2.6% after banking analyst Richard Bove noted Senators "overplayed their hands," and failed to build a strong SEC case against the firm.
The Dow Jones industrial average advanced 53 points, or 0.5%, to close above the 11,000 level. The S&P 500 index added 7 points, or 0.7%, to 1,191.36, while the Nasdaq composite index rose less than a point to 2,471.73. About three stocks rose for every two that fell on the New York Stock Exchange.
This morning's futures suggest stocks would open with modest gains, helped by a steady stream of upbeat corporate earnings and Fed’s extended period language. Investors' risk appetites got a further boost after Hewlett-Packard (NYSE:HPQ) announced plans to acquire ailing smartphone maker Palm (NASDAQ:PALM) in a $1.2 billion deal, and after-the-close estimate-topping reports from Visa (NYSE:V), and Baidu (NASDAQ:BIDU). Goldman Sachs (NYSE:GS) reiterated a "buy" rating on Baidu (NASDAQ:BIDU), lifting the price target to $760 from $675. The firm reported earnings of $2.02 a share, ahead of estimates of $1.50 as revenues surged 59.9% YoY to $190 million.
On the S&P500, about 70% of the shares closed with gains with stocks most heavily battered on Tuesday leading on the upside. Leading the list of gainers were basic materials shares, up 1.2%, followed by 1.1% advances in financials and oil and gas company shares. Utilities (+0.9%), industrials (+0.7%), health care (+0.7%), telecommunications (+0.5%), consumer goods (+0.4%), technology (+0.1%) also closed in the green; however, consumer service sector shares fell 0.2%. On the DJIA, the broad-based gain in 23 of its 30 components was driven by increases in JP Morgan (NYSE:JPM), up 2.5%, and ExxonMobil (NYSE:XOM), up 1.4%.
Today's long list of earnings releases includes such big names as Aetna (NYSE:AET), Bristol-Myers (NYSE:BMY), Colgate-Palmolive (NYSE:CL), ConocoPhillips (NYSE:COP), ExxonMobil (NYSE:XOM), Kellogg (NYSE:K), MetLife (NYSE:MET), Motorola (NYSE:MOT), Procter & Gamble (NYSE:PG), and Safeway (NYSE:SWY).
The preceding article is from one of our external contributors. It does not represent the opinion of Benzinga and has not been edited.
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