Stock Market News for December 17, 2009 - Market News
The US Federal Reserve’s extraordinary intervention in the credit markets that began almost two years ago is likely to continue – at least in the near future.
Yesterday, at the end of the two-day meeting of the Federal Open Market Committee, the Fed repeated its commitment to keep interest rates “exceptionally low" for an “extended period" while admitting the economic recovery remains fragile. However, stocks lost ground after starting the day higher as concern mounted low interest rates would stoke inflation. The Dow Jones industrial average slipped further from its 14-month peak reached Monday.
The FOMC statement noted, "Household spending appears to be expanding at a moderate rate, though it remains constrained by a weak labor market, modest income growth, lower housing wealth, and tight credit." And while deterioration in jobs formation is "abating," companies remain "reluctant to add to payrolls," and continue "cutting back on fixed investment."
Nevertheless, an improving economy and worries that the Fed would be forced to hike interest rates helped the dollar strengthen against a basket of currencies. That is not so good news for stocks since a rising dollar can hurt profits of companies that do business overseas. Bond prices fell, sending corresponding yields higher, after the Fed came out with a more upbeat assessment of the economy.
The Dow Jones industrial average, which rose as much as 58 points during the session, closed down 10.88 points, or 0.1%, at 10,441.12. The broader Standard & Poor's 500 index rose 1.25, or 0.1%, 1,109.18. The Nasdaq composite index rose 5.86 points, or 0.3%, to 2,206.91. The market’s measure of volatility, the CBOE Vix eased 4.4% to 20.43, showing sentiment calm. On the NYSE volume remained a light 1.17 billion shares with advancing shares ahead of declining issues by a three-to-two margin.
On the S&P500 sector action was mixed, with basic materials (+1.2%), financials (+0.6%), oil and gas (+0.5%), tech (+0.5%), consumer goods (+0.2%) and consumer services (+0.1%) ending the day in the green. Declines were recorded in health care (-0.4%), telecommunications (-0.3%), utilities (-0.2%) and industrials (-0.1%).
Key companies reporting their results today include FedEx (NYSE:FDX), General Mills (NYSE:GIS), Oracle (NASDAQ:ORCL), Palm (NASDAQ:PALM), Research in Motion (NASDAQ:RIMM), Nike (NYSE:NKE), and Discover Financial (NYSE:DFS).
The preceding article is from one of our external contributors. It does not represent the opinion of Benzinga and has not been edited.
© 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
