S&P 500 and World Markets Advance as Fed Policy Makers Meet

Nichole Harper
16 Sep, 2015
New York City

U.S. stocks rallied and the S&P 500 index jumped 0.9% after the Federal Reserve started its much anticipated 2-day policy meeting. Markets in Europe also advanced more than 1%. U.S. dollar held firm and crude oil jumped 6%.

[R]4:30 PM New York City, New York – U.S. stocks rallied and the S&P 500 index jumped 0.9% after the Federal Reserve started its much anticipated 2-day policy meeting. Markets in Europe also advanced more than 1%. U.S. dollar held firm and crude oil jumped 6%.[/R]

Stocks on Wall Street rose and three widely followed indexes increased at least 0.6% after the Federal Reserve kicked off its much awaited 2-day policy meeting reviewing the economy and interest rate direction.

Investors digested the latest report on inflation and prices declined largely on the continued fall in fuel prices at pump stations and strong dollar.

The index of consumer prices in August decreased 0.1% from July. For the year all item index before seasonal adjustment increased 0.2%, Department of Labor said.

The food index rose 0.2% and energy index dropped 2% while gasoline index declined 4.1%, after rising three-months in a row.

On Wall Street, Tollbooth Strategy Index gained 44.84 or 0.4% to 10,466.82.

S&P 500 index rose 13.83 or 0.7% to 1,991.76 and the Nasdaq Composite Index gained 18.43 or 0.4% to 4,879.03.

Crude oil in New York jumped $2.61 to $47.20 a barrel and gold soared $20 to $1,122.60 an ounce.

U.S. Movers

Dentsply International Inc ((XRAY)) dropped 2.9% or $1.59 to $52.76 after the consumable dental products maker plans to merge with the rival Sirona Dental Systems Inc in a $5.56 billion all-stock deal to create the world''''s largest dental equipment maker.

The merged entity will be named Dentsply Sirona.

Sirona shareholders will receive 1.8142 per share of Dentsply, representing a 0.7% discount to yesterday’s closing price.

The transaction is expected to closes in the first-quarter in 2016.

FedEx Corporation ((FDX)) slumped 3.6% or $5.56 to $148.45 after the air freight and logistics services provider reported net revenues in the first-quarter ending in August jumped 5.1% from a year ago to $12.3 billion.

Net income in the quarter declined 5.9% to $692 million or $2.42 per diluted share compared to $653 million or $2.26 from the same quarter last year.

FedEx forecasted diluted earnings per share for the fiscal 2016 between $10.40 and $10.90.

General Electric Company ((GE)) jumped 2.7% or 68 cents to $25.98 after the industrial conglomerate said it had divest a $3.7 billion portfolio of loans from its U.K.-based home lending business to a private equity firm Kensington Mortgage Co Ltd.

European Markets

The U.K. unemployment rate for the three months to July was unchanged at 5.5% from the three-month period to April but dropped from 6.2% in a year ago period, Office of the National Statistics said.

In a revised estimate, the annual inflation rate in the euro area fell to 0.1% from 0.2% in July. In the year ago month, the inflation rate was 0.5%, the Statistical Office of the European Communities reported.

In London trading, FTSE 100 index jumped 73.80 or 1.2% to 6,210.55 and in Frankfurt the DAX index rose 31.46 or 0.3% to 10,219.49.

In Paris, CAC 40 index advanced 70.80 or 1.6% to 4,640.17.

Anheuser Busch Inbev SA surged 7.8% to €101.80 after the Belgium-based beer and soft drink maker confirmed that it intends to make a proposal to acquire the U.K.-based rival SABMiller Plc.

SABMiller said it had no further information about the terms but ""would review and respond as appropriate to any proposal which might be made.""

SABMiller Plc stock soared 21% to 3,647 pence.

Inditex SA soared 5.6% to €30.18 after the Spain-based apparel, footwear and fashion accessories retailer reported net sales in the first-half ending in July surged 17% from a year ago to €9.42 billion.

Comparable store sales in the period jumped 7% and store and online sales in local currencies between August 1 and September 10 advanced 16%.

Net profit in the period soared 26% from a year ago to €1.17 billion compared to €928 million.

The retailer said Zara launched online sales in Hong Kong, Macau and Taiwan on September 9, with total online sales in 28 markets.

Asian Markets

Nikkei average in Tokyo closed higher following the market advance in New York.

Investors added exposure ahead of the U.S. Fed rate decision following the Bank of Japan’s action to retain the current stimulus plans.

Stocks in Tokyo closed higher following the market advance in New York and Europe.

The Nikkei 225 Stock Average jumped 145.12 or 0.8% to 18,026.48 and the broader Topix index gained 10.36 to 1,472.60.

The yen strengthened to 120.33 against a dollar.

Sony Corporation increased 1.2% to 3,096 yen after the mobile and electronic equipment maker said it will reduced the price for PlayStation 4 by 13% in the domestic market to 34,980 yen, excluding tax from October 1.

At present available price of consol game PlayStation 4 is 39,980 yen, excluding tax to increase the sales in holiday seasons.

Separately, today Sony Olympus Medical Solutions Inc said their jointly developed 4K surgical endoscopy system will be made available for purchase in early October.

Suzuki Motor Corporation gained 1.6% to 3,842.50 yen after the auto maker will buy back 19.9% stake or up to 122.77 million shares worth about 471.74 billion yen from its Germany-based major shareholder Volkswagen AG after the international arbitration court ordered to divest its holding in the Suzuki Motor.

The automaker said tomorrow before the market open, it will buy back the shares worth about $3.9 billion at today''s closing price of 3,842.50 yen per share.

Trade deficit in August widened to a new monthly high after non-oil imports continued to rise at a faster pace.

Trade deficit in the fiscal year between April and August declined marginally to $57.5 billion from $58.2 billion in a year ago period.

Stocks in Mumbai traded higher following the worldwide market advance on the hopes that the U.S. Fed will delay rate hike to a later date after the meeting on Thursday.

August Exports declined 20.7% to $21.27 billion and slid 15.2% in rupee terms. Imports in the month slid 9.9% to $33.74 billion and fell 3.8% in rupee terms,

The trade deficit in August widened to $12.48 billion from $10.67 billion in a year ago month, the Ministry of Commerce and Industry reported.

Rupee weakened 9 paisa to 66.45 against one U.S. dollar.

The Sensex Index jumped 258.04 or 1% to close at 25,963.97. The CNX Nifty advanced 70.05 or 0.9% to 7,899.15.