Stocks rise ahead of Fed

Investors eye potential stimulus by the Fed. German court allows ratification of eurozone rescue fund. Wholesale inventories rose in July, beating forecast. Import and export prices climb. Facebook shares jump. Apple is set to launch the iPhone 5.

By Melly Alazraki Sep 12, 2012 9:18AM
stock marketUpdated at 11:47 a.m. ET

U.S. stocks were mostly positive Wednesday as the Federal Reserve began its two-day policy meeting and investors hope for additional stimulus measures. Positive US economic data helped solidify gains. Earlier, stocks rose after a German court allowed the country to ratify the eurozone rescue fund, but they wavered when a surprise increase in crude supply caused oil prices to drop.

The Dow Jones Industrial Average ($INDU) was up 29 points at 13,352. The S&P 500 ($INX) was up 3 points at 1,436. The Nasdaq Composite ($COMPX) was up 6 points at 3,110.

Facebook (FB) shares jump 6% after CEO Mark Zuckerberg spoke late Tuesday, while Apple (AAPL) is in focus as it is set to launch the iPhone 5 later in the day.

Sigh of relief in Europe
Germany's Constitutional Court on Wednesday allowed the country to ratify the new 700 billion-euro rescue fund and budget, but it gave Parliament veto powers over any future increases in the size of the fund.

With its decision, the court cleared the way for implementation of the European Stability Mechanism, or ESM, a tool that should help Europe contain its 3-year-old debt crisis with its ability to buy bonds directly from governments.

The decision triggered a sigh of relief from financial markets, with European stocks climbing to a 14-month high and the euro continuing to post gains against the dollar. Spanish bond yields declined.

Meanwhile, eurozone factories increased output by 0.6% in July -- more than expected but still worse off than a year ago, the EU's statistics office Eurostat said. In Britain, the number of those on unemployment benefits dropped in August by the largest amount in two years as companies created new jobs, as the economy looks set to grow.
Asian stocks rallied on economically bullish comments from China's premier, Wen Jiabao, who vowed his nation would meet its official target of 7.5% economic growth for 2012.
 
Hopes of QE3 rise
The Federal Open Market Committee begins a two-day meeting on Wednesday. The central bank looks set to launch a third round of quantitative easing through bond purchases this week.

The measure should lower borrowing costs and breathe more life into an economy that grew only 2% in the second quarter. With the unemployment rate still above 8%, the hope is that the measure will help the economy grow enough to reduce unemployment.

Positive US economic data
Meanwhile, the Commerce Department released import and export prices for August. The prices paid for U.S. imports rose 0.7%, the first increase in five months. That compared with a revised 0.7% decline in July. Excluding fuel costs, import prices fell 0.2%, MarketWatch reported.

The price of U.S.-made goods exported to other nations, meanwhile, rose 0.9% in August after a 0.4% gain in the prior month.

July wholesale inventories increased by 0.7%, much higher than the 0.3% increase economists had expected, according to Briefing.com. In June, inventories dropped by 0.2%. The July increase was the most in five months, indicating perhaps third quarter economic growth may be more solid than expected.


Stocks to watch

Facebook (FB) shares finally registered gains, trading above $20, after CEO Mark Zuckerberg soothed investors late Tuesday in his first interview since the social network's rocky IPO in May. He admitted to misssteps, and said he was disappointed with the stock's performance. But he added he remains optimistic about the company's future. He hinted at new growth areas from mobile to search.


Facebook shares are up despite two brokerage firms lowering their price targets on the stock. Needham & Co. cut its price target from $40 to $25, while Evercore reduced its target to $23 from $34.


Apple (AAPL) is in focus as it unveils its newest iPhone, widely expected to offer 4G wireless technology for the first time and a 4-inch display, longer than the current 3.5 inches.


Chesapeake Energy (CHK) advanced after saying it will sell much of its Permian Basin properties and midstream assets, and certain non-core leasehold, for about $6.9 billion in cash. The move will help the company repay much of its debt and fund operations. The company is selling most of its assets to Royal Dutch Shell (RDS.A) and Chevron (CVX), as well as most of its remaining infrastructure network. 


McDonald's (MCD) Wednesday said it will post calories for all items on its menu boards and drive-thru menus in the U.S.


Mediware Information Systems (MEDW) shares were halted at $15.75. The clinical software solutions provider agreed to be acquired by private-equity firm Thoma Bravo LLC for $22 per share in cash.
Tags: AAPLCHKFB
157Comments
Sep 12, 2012 10:04AM
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APPLE to unveil its new $600 I-Phone.  I am sure all of the Occupy Wall Streeters will be in line to get one.  Meanwhile, I still have my outdated LG flip phone without a camera, much less a data plan.  I call my phone MY Phone - it fits MY needs and it was free 5 years ago.

 

I have better things to spend my money on then the latest phone.  Some economist said the new I Phone would add 1/2% to GDP.  Not sure what he/she is smoking, but a new I Phone will probably be out by Christmas for all the the suckers to spend their money on!

 

Most of these people have no money in the bank and certainly have no retirement saved.  I guess since I saved all my life and lived below my means, I should give some of what I have so these people can get a tattoo while learning how to use their new I Phone.  I never made a 6 figure yearly income.  It is not how much you make, but rather how well you are at first saving money and then making wise chooses about what you spend the remaining money on.

 

I am in control of my life.  - Never ever be a slave to the lender!

Sep 12, 2012 9:47AM
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INEPTOCRACY (in-ep-toc'-ra-cy)

A SYSTEM OF GOVERNMENT WHERE THE LEAST CAPABLE TO LEAD ARE ELECTED BY THE LEAST CAPABLE OF PRODUCING, AND WHERE THE MEMBERS OF SOCIETY LEAST LIKELY TO SUSTAIN THEMSELVES OR SUCCEED, ARE REWARDED WITH GOODS AND SERVICES PAID FOR BY THE CONFISCATED WEALTH OF A DIMINISHING NUMBER OF PRODUCERS.

Calling John Galt, emergency, calling John Galt!
Sep 12, 2012 11:02AM
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Someone (Wise Acre)

 

I am not boasting and I have been through some rough waters.  I lost my job in banking in Sept. 2008 after 36 years.  In July of this year, I was finally able to get work as a contract worker (20 hours a week).  I still do not have health insurance and I can not afford it.  If I had not been a saver and stayed out of debt except for my house, (which I never missed the first payment on), I would have been in big trouble, like a lot of others.

 

People must at least try to be prepared to (go it alone in today's economy at some point and time).  To do this you have to take care of having something to fall back on in the rough times.  It is about setting priorites and way to many people think they are entitled to a lifestyle their income will not support.   

Sep 12, 2012 10:06AM
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Well there you have it, Germany has ruled it is in fact ok to print money.  Now the Euro zone can truly participate along with QE 3 and give the markets a last horay before next years big crash. 

Retog - This Libya/Egypt incident shows why Syria will get no help.  How quickly they forget, I new we should have let them all die in Bengazi when they gang rapped that reporter, these are the people we are helpling?  Let them die in the desert as far as I am concerned. 

- And to beat anyone to the punch Canadian war planes helped in the Libya mission.

Sep 12, 2012 10:39AM
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"Obama has managed to destabilize the entire Middle East without firing a single shot, the Arab spring is now bearing its fruit."

 

LOL, when has the middle east ever been stable?  How did Obama, specifically, manage to destabalize a region that was never stable to begin with?  Man, some of you are coo coo for Cocoa Puffs...

Sep 12, 2012 10:21AM
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So the German courts have decided that it’s OK to send more good money to worthless people, so those same people can stay sitting on their worthless a$$e$. How brilliant!!!


And guess what everyone here thinks the Fed’s should print more money so that the worthless investors can see the market climb for no apparent reason other than an influx of faux money.


Oil prices are rising and the media is stating that it’s because of expected future demand because of the QE3 and Europe’s bailout, when in reality it’s because of the devaluation of the currency in the US and Europe.


The sad part about this whole mess is that no one really wants to work, think, or creative anything of value any more, they just suck of the broke system.


Sitting at your computer gambling as to what the market is going to do it not investing, it’s gambling. You can go to a casino and do that at least that way you'll get some exercise moving from machine to machine.


You so called investors if you really want to invest, why don’t you invest in something real. I’m sure that where you live there is someone with an idea or talent that could use not only your money but also any other talent you may possess. By doing so you will be more in control of the investment and you will get a life.  Let’s start to build this thing from the ground up and say to hell with the rest of the system! 

Sep 12, 2012 10:01AM
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Looks like the German court left their testicles at home.  Ben Dover Bernanke will only add to the mess, so we will be driving towards the cliff now at 100 MPH.
Sep 12, 2012 11:38AM
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all 2010 ... the stock market is back up ... yes you are correct. now go back to the great depression when the stock market dived in half and in 3 years was back up to it's original price ( mirror image of today ) Then over the next 7 years it went lower than it did in the depression after they got everyone to reinvest their money. You are free to go check this out yourself. Point is the stock may be back up but the returns ... aka ... profits are not. Buyer beware ...
Sep 12, 2012 10:20AM
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All this world quantitative easing does nothing to address the systemic macro economic problems. An analogy I like to use is, it is like treating a symptom without treating the disease. Our country, like many in the Euro zone, import and consume on a whole more than we produce and export. The end result if we don't address the imbalance of trade is we have to do 2 things to continue this economic model. 1 lower our standard of living or 2 continue to ignore our lack of productivity, continue to run trade deficits, and borrow to maintain our standard of living while the wealth of our nation is redistributed to our trading partners. The problem with the second option which we have adopted, is it reverts back to option 1 regardless of the efforts of the central banks to increase borrowing. Borrowing is not a solution, a trade surplus, productivity, wealth creation, and savings are the solution. Without those solutions we are just trying to build on a foundation of sand.
Sep 12, 2012 9:52AM
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i hate facebook

 

i literally hate that company

Sep 12, 2012 10:43AM
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Got to love the SCAM MARKET, Germany is bailing out broke countries and they are hoping for more help from the FED. So what happens immediately is that the cost oil goes up so all of us throughout the world can pay more for gas and have less spending money.

When will the idiots learn the only people these stimulus are helping is the market.

How does it help the hard working AMERICANS??

Sep 12, 2012 11:25AM
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MirageGuy:

The working people are tired of supporting the democrat leech class that votes for a living.----

 

 

This is what President Clinton meant when he said these folks are living in a alternate  universe

Sep 12, 2012 10:02AM
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i guess if the whole world completes their own refi's, then everything is OK! 

 

debt?  does it matter?  doesn't seem like anyone in charge is concerned.  as long as they keep getting tax money, why would they care? 

 

scary vote coming in california in november.  we'll see how many people vote in a tax increase so the state can blow even more of our cash! 

 

what happens out west seems to bleed east

Sep 12, 2012 11:09AM
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Ever notice how the cheerleader pundits on those droning business channels often say watch the stock markets for clues on where the economy is headed: The stock market knows. It's smart. 

 

Hmm, is that why dow was at an all-time high end of 2007 when the current recession had already started? And now it's nearing an all-time high again during what many call a depression.

 

Sep 12, 2012 11:35AM
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"U.S. stocks traded in a narrow range after a surprise increase in crude supply caused oil prices to drop."

Why no specifics on the increase in crude supply?

Has President Obama been releasing reserves from the Strategic Petroleum Reserve to lower gas prices at the pump, in order to get re-elected?
Sep 12, 2012 11:21AM
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"You have to vote for me, to find out how i'm going to fix this mess" - no complaints

" we have to pass it to find out what;s in it" - ACA = outrage!!!!

 

What is the difference???

Sep 12, 2012 12:07PM
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The fiscal cliff is coming....  And it may be a good thing....

Sure taxes will increase, this is a good thing, although they need to increase a lot more.  Spending must be slashed, and if that means half comes form defense that is also a good thing.  The states that will suffer the most from the defense cuts are California, Washington, New York, Texas and Illinois.   A lot of union folk will lose their jobs.  

Mind you this will still leave a deficit of over 800 billion.   But we need to start cutting.  The economy cannot heal and get better until we shrink government.  It will be painful.   

I prefer NO new taxes.  But if taxes must be raised, they SHIOULD be raised across the board.  Let the 48% deadbeats that pay nothing now, start pulling their weight.

The house needs to just say no to all NEW SPENDING.  And stop passing any spending bills at all until all of Obama's new spending is rolled back.   
Sep 12, 2012 9:58AM
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The greedy 'pump and dump' traders are back!  They are worse than bloodsucking oil traders
Sep 12, 2012 12:08PM
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The markets have been up on Hope that Bendover Bernanke will announce another round of QE for the last 6 months.  Bendover knows that all stimulus does is give the Big Banks another hand full of cash to run to the trading desk and run up the price of commodities.  The higher price for food and gasoline by the banks further strangles the middle class which cuts back even more to just survive.  The cut back in purchases cause the producers to cut back production and hiring.  Bendover knows that if the gas prices stay high through October and unemployment goes up or stays at 8.1% the Dems will lose.  On the other hand if no QE is announced the over bought stock market will correct about 20% giving the big donors no reason to reelect Obummer.  The trillions of dollars spent on stimulus didn't create any jobs and in fact caused the loss of jobs.

 

As for the sudden, unexpected surplus in oil, BS.  There has been a glut on the market for months, the speculators (Big Banks and Wall Street) have added 42% to the cost of oil and gasoline.  

Sep 12, 2012 11:19AM
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Here was the first official press release after radical Muslims murdered our Ambassador and 3 others in Libya - ABSOLUTELY DISGRACEFUL!

"September 11, 2012

The Embassy of the United States in Cairo condemns the continuing efforts by misguided individuals to hurt the religious feelings of Muslims – as we condemn efforts to offend believers of all religions. Today, the 11th anniversary of the September 11, 2001 terrorist attacks on the United States, Americans are honoring our patriots and those who serve our nation as the fitting response to the enemies of democracy. Respect for religious beliefs is a cornerstone of American democracy. We firmly reject the actions by those who abuse the universal right of free speech to hurt the religious beliefs of others"

http://egypt.usembassy.gov/pr091112.html

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