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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Max......Guess you know by now?? Republicans are very lame, when it comes to history, particularily any that reflects in a negative stature...To the GOP.
Of course we do seem to have a fair share of Revisionist History coming from their ranks.
And "The private sector is fine" is about the same as Romney's "I don't care about poor people." The private sector is fine compared to the state of state and local public employment.
MARCIE......IF you are going to keep using the word LIER; Please spell it correctly, L-I-A-R...
I'm not a Grammer cop; Hardly, but do us all the favor....
Divine Right...Didn't really realize Marxism had been around or practiced for a 100 years ??
And the money being borrowed isn't currently being used. It's idle, the private sector isn't borrowing it because there's insufficient demand to support expansion.
I think you mean amperage when you're talking about batteries. Voltage concerns the the flow, amperage is the actual power. to use that example, we aren't drawing the full capacity in terms of amps. We have a 10 amp fuse but we're only using 6 amps. The government borrowing money that's otherwise idle is like hooking another couple amps on that fuse.
2 Sick........I had a little trouble deciphering Webster's definition of an investor...
Was going to check and see if you may have left something out or omitted ?
Strange that your or their thoughts only deal with 401s or Stocks or Markets?
Investments and investors come in many sizes, shapes and colors...
Purchasing a bag of Diamonds or a bar of Gold or Silver.
Buying a piece of land or Real Estate.
Purchase of rare Stamps,Coins or Artwork, even certain Vechicles.
Used to be buying your home...But flippers still speculate everyday. Remodeling your home.
Investing in you Childrens Education, Grand Children's; Hell, just investments in Kids period.
Investing with friends or family in raising or producing crops or livestock...
Or another business Venture, maybe like our Local, Steve.
Had a lot of trouble figuring out what Webster really meant....He didn't seem to bright ??
Oh yeah..Then we have Stocks,Equities,Bonds, Mutual Funds, ETFs,CDs and a host of others.
Our government throwing away more money we don't have is not going to get us out of this mess. Nor will it help if our government requires banks to make bad loans. Corporations are sitting on lots of cash what is missing is the confidence that our country is moving in the right direction. What people and businesses want is for our government to balance the budget and show we have the fiscal restraint to live within our means. People are afraid of what the future holds with runaway national debt and the taxes that will be required to pay the interest. Stop kicking the can down the road and have the guts to deal with the problem.
I just gotta say with the way the term Commie is thrown around here... it feels like a Rocky movie from the 80's....
EYE OF THE TIGER!
I MUST BREAK YOU!
Fiscal policy that you don't agree with isn't money laundering, it's just fiscal policy that you don't agree with.
The multiplier effect is known, denying it simply denying reality. One of Reagan's principle advisers criticized the stimulus because it didn't have enough direct government purchases, one of the highest mutlipliers since it makes the government act like nothing more than a big customer. And you are right, saving cuts back on this impact. Which is why purchases, that necessitate continued spending on capital equipment, labor, and raw material to produce the good, are much more effective than tax breaks which are saved in greater proportion. It also shows why it's better to let the bottom incomes keep more or have more distributed to them, since they don't save as much proportionally, as the top. That's from a strictly stimulus viewpoint.
On your other post, how does government borrowing get measured? Clearly the private market uses the income the investment generates. The normal measuring stick for sovereigns is GDP. So if we can borrow to create more growth than the interest rate, it makes sense, right? So when the federal government can borrow at 1.6%?
Hope and Change is now Liar & Crook?
What becomes then, of Change You Can Believe In?
Can it be -- Corruption you can Believe in ?
Cronyism - Hell yeah!
Communism we can all believe in?
What about :
I got your back Mutha Fluffa ?
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[BRIEFING.COM] Stocks entered the weekend on a mixed note as the S&P 500 shed 0.1% while the Dow ended with a gain of 0.1%.
The major averages began the day on a lower note as nine of ten sectors saw losses of more than 0.5%.
The consumer staples sector was the lone exception as the group spent the entire day in positive territory thanks to the relative strength of Dow component Procter & Gamble (PG 81.89, +3.19). The second-largest staple stock advanced ... More
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