Wall Street opened higher but subsequently pared gains after
Philadelphia Fed President Charles Plosser said the Fed faced
"immense" challenges now that it had reduced bond-buying, and that
it needed to be cognizant of a potential rapid rise in future
Volatility was exacerbated by light trading volume, with about 4.61
billion shares traded on all U.S. platforms, according to BATS
exchange data, well below average, with many market participants out
in the wake of the New Year's holiday, as well as a snowstorm in the
"Plosser suggested that it might not be an easy or smooth process
for the Fed to unwind its balance sheet, which could have been be an
indication the Fed could act sooner on ending bond buying than is
currently expected," said Mark Luschini, chief investment strategist
at Janney Montgomery Scott in Philadelphia.
Following Plosser's comments, Fed Chairman Ben Bernanke said that
the central bank was no less committed to accommodative monetary
policies despite the recent announcement that it would slow its
stimulus program. He also said the U.S. economic recovery "clearly
Equities briefly turned positive following the comments before
returning to breakeven territory.
General Motors <GM.N> fell 3.4 percent to $39.57, one of the S&P
500's biggest decliners, after the automaker reported lower December
sales, below analysts' expectations of a slight gain. Ford Motor Co
<F.N> rose 0.5 percent to $15.51 after its sales.
The Dow Jones industrial average <.DJI> was up 28.64 points, or 0.17
percent, at 16,469.99. The Standard & Poor's 500 Index <.SPX> was
down 0.62 points, or 0.03 percent, at 1,831.36. The Nasdaq Composite
Index <.IXIC> was down 11.16 points, or 0.27 percent, at 4,131.91.
The S&P's slight decline marked the first time since 2005 that the
benchmark index started a year with two straight negative sessions.
For the week, the Dow fell less than 0.1 percent while both the S&P
and Nasdaq lost 0.6 percent.
[to top of second column]
"Valuations are full, but not egregiously rich right now," said
Luschini, who oversees about $60 billion in assets. "In order for
markets to really outperform now, we need to see better growth
develop and for earnings to brighten considerably."
Crude oil fell 1.3 percent, bringing its 2014 year-to-date losses to
4.3 percent, a fact that boosted airline stocks on Friday. Delta Air
Lines <DAL.N> rose 5.5 percent to $29.23 as the S&P's biggest gainer
while Southwest Airlines <LUV.N> rose 2.9 percent to $19.42.
FireEye Inc <FEYE.O> surged 39 percent to $57.02 after the
cybersecurity company acquired Mandiant Corp, the computer forensics
specialist best known for unveiling a secretive Chinese military
unit believed to be behind a series of hacking attacks on U.S.
Twitter <TWTR.N> gained 2.2 percent to $69. Shares in the social
media company burst out of the gate in 2014 with a gain of more than
About 62 percent of stocks traded on the New York Stock Exchange
closed higher on the day, while 59 percent of Nasdaq-listed shares
ended in positive territory.
(Editing by Nick Zieminski)
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