And Red Hat posts higher profit.
Updated at 5:10 p.m. ET
Two technology companies had good news to report late Wednesday.
Seagate Technology (STX) said strong demand is the reason for an increased forecast for fiscal-fourth-quarter revenue. Seagate, which makes hard-disk drives for computers, expects sales for the quarter ending July 3 to come in between $2.2 billion and $2.3 billion, up from previous guidance of between $1.9 billion and $2.2 billion. Analysts are looking for $2.09 billion in sales.
Seagate also said it expects fiscal-first-quarter revenue to be between $2.35 billion and $2.5 billion, ahead of Wall Street's forecast for $2.27 billion.
The home furnishings retailer tops Wall Street's forecast.
Updated at 5:15 p.m. ET
Bed Bath & Beyond (BBBY) was one retailer that benefited from the recession, in particular from the bankruptcy of competitor Linens 'N Things.
Bed Bath & Beyond late Wednesday said fiscal-first-quarter net income rose 13.5% to $87.5 million, or 34 cents per share, from $76.8 million, or 30 cents per share, a year ago. Analysts had been looking for earnings of 25 cents per share.
Rival Linens 'N Things filed for bankruptcy in May 2008 and began shutting stores in October. Bed Bath & Beyond picked up its customers, helping boost revenue nearly 3% to $1.69 billion in the last three months.
Fed chief Ben Bernanke denies pressuring Bank of America to go through with the Merrill deal. Nike's profit tumbles.
Updated at 2:05 p.m. ET
Stocks were surging today as retail, industrials and commodities shares made gains.
Crude oil in New York was up $1.88 to $70.55 a barrel this afternoon after Nigerian rebels attacked a Royal Dutch Shell (RDS.A) pipeline.
"The Nigerian situation is likely to get a lot worse before there's an improvement," Michael Lynch, president of Strategic Energy & Economic Research, told Bloomberg News. "There's a security premium in the oil market, but it's less than a few years ago because we have more supply available to replace any missing barrels."
The major indexes were soaring this afternoon. At 2:05 p.m. ET, the Dow Jones Industrial Average ($INDU) was up 147 points, or 1.8%, to 8,447. The Nasdaq Composite Index ($COMPX) had added 28 points, or 1.6%, to 1,820, and the Standard & Poor's 500 Index ($INX) had gained 16 points, or 1.8%, to 917.
If the S&P's gain holds, it will move into the black again for the year.
Adding to the market's cheer: lower interest rates after better-than-expected results from a $27 billion auction of 7-year Treasury notes.
The notes yielded 3.329%; the expectation was for 3.36%, Bloomberg News said. There were $2.82 in bids for every dollar of bonds for sale, a sign of strong demand.
The yield on the 10-year Treasury note fell to 3.59% this afternoon from 3.69%. The yield hit 4% on June 11 as markets started to fret inflation was going to be a problem.
Meanwhile, Bed Bath & Beyond (BBBY) had jumped 10.5% to $31.36. The S&P Retail Index ($RLX) was up 4% today. There is also talk of consolidation among retailers, CNBC's Bob Pisani reported, which was helping boost the group.
Bernanke testifies on Capitol Hill
Stocks were not fazed by the three hours of grilling that Federal Reserve Chairman Ben Bernanke faced today from the House Oversight Committee. Bernanke was testifying about Bank of America's (BAC) deal to buy Merrill Lynch last fall.
"I believe that the Federal Reserve acted with the highest integrity throughout its discussions with Bank of America regarding that company's acquisition of Merrill Lynch," Bernanke said.
The footwear company is also hit by a decline in orders
Nike (NKE) did not escape the grip of the global recession in its most recent quarter.
The athletic footwear giant late Wednesday said fiscal-fourth-quarter net income fell 30% to $341.1 million, or 70 cents per share, due in part to costs related to job cuts. The company earned $490.5 million, or 98 cents per share in the same quarter last year.
Excluding charges, Nike said it would have earned 99 cents per share, topping analysts' expectations by 3 cents.
Investors are trying to anticipate the outcome of Fed Chairman Bernanke's comments today, along with jobless and GDP numbers.
By Elizabeth Trotta, TheStreet.com
Futures for the S&P 500 were higher by 0.2 points at 898.20, and were 1.7 points above fair value. Futures on the Nasdaq were falling 2.5 points to 1444.75, and were 0.91 points below fair value.
At 8:30 a.m. EDT, the latest weekly initial jobless claims figures as well as the final reading on gross domestic product in the first quarter will be released. Expectations are for 600,000 new jobless claims last week and a contraction of 5.7% in GDP.
Wall Street will also be watching Federal Chairman Ben Bernanke's testimony on Capitol Hill on the Bank of America/Merrill Lynch merger.
The Federal Reserve says a weak economy -- not inflation -- is the problem. The Dow slips; Oracle boosts techs. Boeing falls again.
Updated 6:05 p.m. ET.
The Federal Reserve left its key short-term interest rates alone today, and it signaled that the economy, while starting to stabilize, is so weak that there's no need to raise interest rates anytime soon.
Market analysts saw the Fed indicating that there will be no interest-rate increases in 2009.
Wall Street had a slightly negative reaction. Interest rates moved up. Stocks, which had been up nicely in the morning, mostly finished higher.
The Dow Jones industrials ($INDU), however, gave up all of a 105-point gain from the morning and finished down slightly.
The Fed did acknowledge concerns about the enormous size of its spending to keep the financial system functioning, but it did not offer specifics on how it may dial those efforts back.
The Fed's decision today left its target for the federal funds rate at 0% to 0.25%. The federal funds rate is what banks charge each other for overnight loans and is the foundation for all short-term interest rates, including corporate interest rates and many consumer rates.
The Fed also left its discount rate at 0.5%. That's what it charges banks for short-term loans.
Up about 40 points before the Fed announcement at 2:15 p.m. ET, the Dow slowly but surely moved lower. The blue-chip index closed down 23 points, or 0.3% to 8,300.
AAA says higher gas prices will keep some people home.
The recent rise in gas prices and the economic downturn are causing some Americans to stay off the roads this Fourth of July weekend, AAA said. About 37.1 million people will travel 50 miles or more from home over the holiday, AAA forecast, a 1.9% drop from last year.
"Many Americans remain cautious about the outlook for their personal finances, and these attitudes are reflected in the slight decline in travel we are forecasting for the upcoming holiday weekend," said AAA Chief Executive Robert Darbelnet.
The banking giant is trying to make up for smaller bonuses.
Updated at 5 p.m. ET
Citigroup (C) is increasing base salaries by up to 50% this year, according to The New York Times, in an effort to keep talent at the banking giant as many employees now face smaller bonuses.
Citigroup will also reportedly award stock options to its employees as another means to retain top employees.
"Citi continues to examine ways to ensure its employee compensation practices are competitive in this very challenging market environment," Citi said in a statement today. "Any salary adjustments are not intended to increase total annual compensation, rather to adjust the balance between fixed and variable compensation."
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[BRIEFING.COM] The time is drawing near for the FOMC to release its latest policy directive. It will be done at the top of the hour; and the major indices are mixed at the bottom of the hour.
Market participants are expecting the policy directive to read very similarly to the last directive. Any new nuggets of information, therefore, that suggest the Fed is angling to prepare the market for the fed funds rate to go up sooner rather than later would be a source of ... More
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