In yesterday’s trade, it was rally time for the U.S. stocks as they advanced on expectations that the Federal Reserve will make only moderate changes to its stimulus. The Federal Open Market Committee is discussing whether to trim its bond purchases, or quantitative easing and if yes, to what extent.
The media and investors will be able to know about the FOMC’s decision only when it releases it on Wednesday afternoon, followed by a Bernanke news conference. Market observers believe that Fed chairman Ben Bernanke may announce a scale-back of purchases by $10 billion a month which currently stands at $75 billion.
Investors in fact are expecting that the $10 billion will be a better option as it will not be big enough to pose a problem for the Fed and good enough to generate a positive outlook in market. They also expect that there would not be any change in the rates that are close to zero as they believe that the Fed is very aware of how investors will react to any changes and they are efficient enough to manage expectations.
Rally Time for Microsoft and Pandora Media
Microsoft shares started at 33.42 in yesterday’s trading and closed at 32.93+0.13 (0.39%( amidst the news that the company has announced a share buyback worth $40bn. The company also announced that it will raise its dividend payout to shareholders by 22%. With the buyback and raised dividend, Microsoft is looking to encourage investors.
Pandora Media Inc (P.N) shares though opened lower at 23.23, closed at 25.19+1.20 (5.00%(. Thus, the company gained 5% in yesterday’s trade amidst the news that it has won a Manhattan federal court decision rejecting efforts by some music publishers to narrow a license that enables the largest U.S. Internet radio service to play their music.
Dow Jones Industrial Average
In a good trading day, the Dow Jones industrial average (DJI) rose 34.95 points or 0.23% to 15,529.73. On the other hand, the S&P 500 (SPX.) gained 7.16 points or 0.42%, and closed at 1,704.76. Similarly, the NASDAQ Composite (IXIC.) added 27.853 points or 0.75%, and closed at 3,745.699.
Brent was down by 2.5% in the past two days, and finally settled to 1.7% at $108.19. A better outcome of lowering down of oil prices is that airline stocks have started doing well, as Delta shares rose 0.7% to $23.32, while U.S. Airways climbed 3.6% to $18.72.
To contact the reporter of this story: Jonathan Millet at firstname.lastname@example.org