Stocks struggle ahead of Fed
Markets await the central bank's policy statement. Spanish and Italian 10-year bond yields ease. The Bank of England leans toward stimulus measures. Procter & Gamble cuts its outlook.
By Andrea Tse
Stocks wavered Wednesday as investors awaited the outcome of the latest Federal Reserve meeting.
Stocks jumped Tuesday, with the S&P 500 soaring to a one-month high, as risk-tolerant investors bet that additional fiscal stimulus is forthcoming from the Fed.
"The Fed offers a moment of economic sanity with its rate decision," said Paul Donovan, a global economist at UBS, ahead of the conclusion of the Fed's two-day meeting."
"If the Fed does nothing but hints . . . that further action may come as soon as the Aug. 1, 2012, FOMC meeting, the markets would still likely be disappointed," said John Canally, an economist for LPL Financial. "The markets' focus then would shift to Bernanke's press conference and back to the Fed's new economic forecast as participants try to gauge the timing of the next round of stimulus."
After the Federal Open Market Committee meeting, the Federal Reserve will post its statement at 12:30 p.m. ET, followed by the outlook of policymakers on the Fed funds rate and economy at 2 p.m. Fed Chairman Ben Bernanke is expected to address the press at 2:15 p.m.
Asian markets settled higher in anticipation of the outcome of the Fed meeting. Hong Kong's Hang Seng index settled up 0.53%, and Japan's Nikkei average closed higher by 1.11%.
The FTSE in London was up by 0.56%, and the DAX in Germany was up 0.31%, with the euro gaining a bit of traction.
The FTSE was edging higher as data showed that employment in the United Kingdom increased to the highest level in more than three years in April and as minutes from the Bank of England's last policy meeting indicated that the central bank is very close to supporting more monetary stimulus for the economy.
Both Spanish and Italian 10-year yields were easing Wednesday.
Eurozone leaders said at the Group of 20 summit of industrialized nations in Mexico this week that they will strive to reach an agreement on integrating their regional banks by December.
In Greece, there looked to be significant progress in forming a coalition among pro-bailout parties.
August crude oil futures were down 9 cents at $84.26 a barrel. August gold futures were slipping $7.40 to $1,615.80 an ounce.
The benchmark 10-year Treasury was down 2/32, raising the yield to 1.627%, while the dollar was trading sideways, according to the dollar index.
In corporate news, Adobe Systems (ADBE), the publishing software maker, provided a disappointing outlook for its fiscal third quarter on Tuesday because of a weaker demand forecast for Europe. Adobe forecast non-GAAP earnings of 56 cents to 61 cents a share for the three months ending in August on revenue of $1.075 billion to $1.125 billion. Analysts forecast profit of 61 cents a share on revenue of $1.133 billion.
Procter & Gamble (PG), the consumer-products giant, reduced its fourth-quarter profit and revenue forecasts because of slower-than-anticipated sales growth in developed markets.
P&G said Wednesday it expects to post core earnings for the quarter ending in June of 75 cents to 79 cents a share. Its previous estimate was 79 cents to 85 cents a share.
Analysts forecast core earnings of 82 cents a share in P&G's fiscal fourth quarter.
P&G said organic sales are expected to rise 2% to 3%. Its previous estimate was 4% to 5%.
The company said foreign exchange is expected to reduce net sales by 4%. Net sales are expected to be in the range of down 2% to 1%. It previously expected an increase of 1% to 2%.
Quest Software (QSFT) agreed to a higher buyout bid of $2.17 billion after Insight Venture Partners added Vector Capital as a new partner. The new bid is for $25.75 a share, up from a competing bid of $25.50 a share that was reportedly made by Dell (DELL).
Jabil Circuit (JBL) reported adjusted fiscal-third-quarter profit of 64 cents a share on revenue of $4.3 billion, in line with analysts' estimates.
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Just amazing what is considered GOOD NEWS these days.....
Let's get our head together, dump "big" and get going forward again.
Jamie Dimon has gotten too many free rides now, a friggin liar, like all of his ilk.
Even at the shareholders meeting...Explanations and excuses for the $2 billion losses, shareholders allowing him to keep his job......Then within a day or two of annoucing an increase of 50% more losses, on top of, bringing totals to $3 Billion down the drain..
Congressional Hearings.....How fruitful was that?
Infantile and juvenile questions.....Allowing Dimon to Monkey dance them, bobbing and swaying...
And we elect and pay these azzholes to do WHAT ??
our government subsidizes every big business...... sad use of our tax money. we pay ~ they write the checks. then they ask for more......
>>>>My favorite is the article decrying Jamie Dimon and JPM Chase as a welfare recipient.<<<<
UE rate still above 8% - check
GDP hovering around 2% - check
FedEx and P&G forecasting a global slowdown - check
Greece asking for more time to implement austerity - check
Spanish bond rates soaring - check
Looming fight over raising the debt ceiling/tax cuts/spending cuts - check
Housing still in a slump - check
Downgrade of US banks who are holding tons of Euro paper - check
All of this adds up to one thing - more stimulus from the Fed, which should mean at least another 5-10% to the upside for stocks.
If you're not convinced that the newly-elected Greeks can form a coalition and build a new gov by the next deadline, it could be a prime spot to short the Euro....
We have a situation where the governments of the world think that they can right the economic ship by simply pumping more capital into it (i.e. stimulus). The reason that this idea is flawed is simple... Government(s) do not have their own money... That is, in order for them to put money in the economy, they have to take it out of the economy first. They take money out of the economy directly via taxation. However, they also do it by printing money (which devalues the currency and causes inflation), or by borrowing it (which has a long term cost of interest)... Keynsian type people think that there is a muliplier effect when the gov. spends money, but, that is simply not the case. If the gov takes $20 million out of the economy, there is no way $21 million goes back in... It just doesn't happen that way.
The most un-American president The United States has EVER had..
Inflation leads to deflation... Didn't we just experience that with the housing bubble??? Stimulating the economy by pumping more wasteful government spending into it only kicks the can further down the road, and leads to an even bigger bust (eventually).
Classic Lady, Obama exerting Executive Privilege is a good thing. It demonstrates his Administrations promise of transparency and.... oh wait... Sorry, that was a different Administration.
Barack "Tricky Dick Nixon" O'Bama is elbow deep in this scandal and is toast come November. He had better pack up his stuff and hope he and Holder don't get seated next to Blago in Colorado!
Damn: My P&G is down. I guess the presidents expansion of food stamps won't cover the items P&G makes. Ex: tooth paste, tooth floss, mouth wash, toilet paper, laundry detergent, ....
Maybe the entitled ones can speak up and demand more so it'll offset the weak earnings abroad.
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[BRIEFING.COM] The stock market ended the Tuesday session on a lower note after generally upbeat earnings took the back seat to geopolitical concerns. The S&P 500 (-0.5%) and Nasdaq Composite (-0.1%) ended on their lows, while the Russell 2000 (+0.3%) displayed relative strength.
Once again, market participants were focused on quarterly reports in the early going, but geopolitical worries overshadowed the impact of mostly better than expected earnings. Specifically, equities ... More
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