Stocks rise with help from Microsoft
US stocks ended with moderate gains at Wall Street on Tuesday, 17 September 013. Stocks rose after Microsoft hiked its dividend and as Wall Street awaited the next day's monetary-policy decision from the Federal Reserve. Some believe the market is only where it is because of the Fed's asset purchase program. Accordingly, a decision on Wednesday to cut back on its asset purchases will provide a good signpost in the future for determining just how well the stock market and the economy were able to handle a Fed tapering.
The Dow Jones Industrial Average climbed 34.95 points, or 0.2%, to 15,529.73. The Nasdaq Composite rose 27.85 points, or 0.8%, to 3,745.70. The S&P 500 Index rose 7.16 points, or 0.4%, to 1,704.76.
Nineteen out of thirty Dow components ended higher led by Alcoa and Intel. Technology and consumer discretionary paced gains and materials was the sole decliner among the 10 major industry groups.
Shares of Microsoft rose 0.4% after the Dow component and world's biggest software company hiked its quarterly payment to shareholders by 22% and set a $40 billion share-repurchase plan.
On the economic front at Wall Street today, the Consumer Price Index for August didn't reveal any worrisome inflation signals. Total CPI and core CPI, which excludes food and energy, both rose just 0.1% from July. Over the last 12 months, total CPI is up 1.5% while core CPI is up 1.8%. That is below the 2.0% rate of increase seen for each in September 2012 when the Fed announced QE3.
The other piece of economic news today showed homebuilder confidence held pretty steady in September. The NAHB Housing Market index checked in at 58 (consensus 59) versus 59 for August.
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Traders and investors are looking forward to this week's meeting of the U.S. Federal Reserve's Open Market Committee (FOMC). The meeting began on Tuesday and ends at midday Wednesday. Fed Chairman Ben Bernanke will also hold a press conference Wednesday afternoon.
A majority of the market place believes the U.S. central bank at this week's meeting will announce it will begin to scale back, or taper its monthly bond-buying program. Some reckon the Fed will announce a $10 billion or $15 billion reduction in its $85 billion-a-month bond-buying program. The surprise to the markets could be if the Fed either does nothing at this meeting, or is more aggressive in its initial reduction in bond purchases. For the past several weeks the market place has been fixated on what the U.S. central bank will announce at the conclusion of this week's FOMC meeting.
Bullion metal prices ended lower on Tuesday, 17 September 2013 at Comex. Gold for December delivery ended lower by $8.4 (0.6%) at $1,309.4 an ounce on the Comex division of the New York Mercantile Exchange on Tuesday. December silver fell $0.23 or 1% to $21.78 an ounce on Comex on Tuesday.
Crude-oil prices ended lower on Tuesday, 17 September 2013 at Nymex. Crude oil ended lower as a deal to avert a military strike against Syria eased worries about potential disruptions in oil supplies from the Middle East. Crude oil for October delivery fell $1.17 or 1.1%, to settle at $105.42 a barrel on the New York Mercantile Exchange.
Advancing issues outran those declining by a more-than 2-to-1 ratio on the New York Stock Exchange, where 577 million shares traded. Composite volume approached 2.8 billion.
Indian ADRs ended mostly higher on Tuesday. In the IT space, Infosys was up 0.2% and Wipro was up 3.6%. In the Banking space, HDFC Bank was down 0.01% and ICICI Bank was up 0.2%. In other space, Tata Motors was up 1.6% and Dr Reddys was up 3.8%.
The FOMC decision and the Fed's updated economic projections will be released at 2:00 p.m. ET on Wednesday. Fed Chairman Bernanke's press conference will follow at 2:30 p.m. ET. What the chairman communicates at that press conference is arguably more important than what is said in the directive.
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