Fed Views Extends Rally in Stocks, Nasdaq Above 3,000

Bikram Pandey
13 Mar, 2012
New York City

U.S. indexes gained nearly 2% after retail sales confirmed the improving economic climate and Fed offered mildly positive assessment. Copper and commodities advanced. The tech heavy Nasdaq trades at a new high since 2000 and the narrow Dow index reaches the high not seen since December 2007.

[R]4:05 PM New York – U.S. indexes gained nearly 2% after retail sales confirmed the improving economic climate and Fed offered mildly positive assessment. Copper and commodities advanced. The tech heavy Nasdaq trades at a new high since 2000 and the narrow Dow index reaches the high not seen since December 2007.[/R]

U.S. indexes traded higher after retail sales rose 1.1% in February, the fastest pace in five months. The steady stream of improving U.S. economic data lifted indexes to multi-year highs.

The tech heavy Nasdaq flirted with a new high for the decade and the narrowly focused index of large companies, the Dow crossed a milestone and reached a high not seen since December 2007.

The Federal Reserve left its key lending rate on hold and did not announce new plans for asset purchase or monetary policy action. The Fed also reaffirmed its plan to keep interest rates near zero at least through 2014.

However, the Fed’s statement was relatively optimistic and noted that unemployment rate had eased “notably but remained elevated.” The rate setting committee expects economic growth in the coming quarters to be “moderate” and anticipated that the unemployment rate will “decline gradually.”

In corporate news, FactSet Research soared more than 7% after second quarter net grew 3.3% to $46.7 million, ahead of analysts’ expectations. Retailers and credit card processors traded higher after retail sales increased in February. Urban Outfitters Inc dropped 5% after it reported lower than expected earnings in the fourth quarter. Carmike Cinemas Inc soared 18% after fourth quarter earnings were ahead of expectations.

Midas Inc soared 27% after it agreed to be acquired by tire supplier TBC Corp. for $11.50 a share.

European indexes gained after German sentiment improved in March. Euro area finance ministers approved a second bailout package for Greece but Greece may need additional spending cuts. BMW forecasted new highs in sales volume and pre-tax earnings for 2012.

German confidence improved to a 21-month high in March. French consumer prices rose and Italian and Spanish inflation in February matched previous estimates. Greek import price inflation soared and Dutch surplus rose in January.

The UK indexes advanced after home prices rose in February and trade deficit widened, leading economic index climbed and Irish factory output declined in January. Prudential fiscal 2011 pre-tax profits surged 33%.

Stocks in Tokyo trading trimmed gains after the central bank left its asset purchase program intact and offered loans in the U.S. dollars denomination. Auto headlights makers declined on the price fixing investigation.

Australian stock indexes gained after struggling for three days in a row. Loans issued to the home buyers in January declined 2.3% as new home buyers stay away from making purchase commitment.

Commodities, Bonds and Currencies

The 10-year U.S. bond yield decreased to 2.07% and 30-year U.S. bond traded fell to 3.21%.

The U.S. dollar decreased at $1.311 to one euro and closed lower against the Japanese yen to 82.69 yen.

Immediate delivery futures of Texas crude oil increased 76 cents to $107.10 a barrel and Brent crude futures added $1.03 to $126.37. Futures of natural gas decreased 0.05 cents to $2.21 per mbtu and gasoline price increased 3.7 cents to 336.02 cents a gallon.

In metals trading, copper increased 6.70 cents to $3.902 per pound, gold decreased $2.80 to $1,697.80 per ounce and silver increased 20 cents to $33.61.