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Trading has been choppy on Wall Street this week as investors wrestle with the question of whether the Fed will ease its economic stimulus. Minutes released last week from the Fed's last policy meeting showed that some central bank officials favored slowing the purchases as early as next month, if the economy improves enough. The program has been a major factor supporting a rally in stocks by encouraging investors to buy riskier assets. The Dow Jones industrial average rose 106 points Tuesday, then fell by the same amount Wednesday, leading some market watchers to ask whether the rally that has pushed the Dow and S&P 500 index to record levels may be fizzling out. While the prospect of a change in Fed strategy is unsettling investors, ultimately, they should welcome the end of the Fed's stimulus because it means that the economy is strong enough to stand on its own two feet, JJ Kinahan, chief derivatives strategist at TD Ameritrade, said. "It's the vote of confidence," Kinahan said. "It should mean that the overall economy is healthy." Phone companies and the makers of consumer staples were the biggest decliners, dropping 1 percent and 0.4 percent respectively. These so-called defensive stocks that pay rich dividends have fallen out of favor this month after investors pushed their prices higher at the start of the year. Stock investors have had a good year so far. The Dow is 16.9 percent higher and has set record closing highs on nine days in May. The S&P 500 index is up 16 percent and is on track to rise for a seventh straight month, its longest winning streak since 2009. In commodities trading, oil rose 48 cents to $93.61 a barrel. Gold rose $20.20, or 1.5 percent, to $1,411.50 an ounce. The dollar fell against the euro and the Japanese yen. In government bond trading, the yield on the 10-year note was unchanged at 2.12 percent. Among other stocks making big moves: EMC, a data storage equipment maker, rose $1.27, or 5.4 percent, to $24.93 after the company said it will ramp up its stock buyback program and begin paying a quarterly dividend. Big Lots, a discount store chain, fell $3.45, or 9 percent, to $34.93 after the company reported a 21 percent drop in quarterly income and lowered its full-year revenue forecast. First Solar rose $3.39, or 6.5 percent, to $55.15 after the company's stock was upgraded to "buy" from "neutral" by Goldman Sachs. The investment bank says the solar energy's company's earnings may rise more than Wall Street forecasts and that it might buy other companies or its own stock as it generates more cash.
[Associated
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