Fed on Hold, Dollar Drops; Hyatt IPO

123jump.com Staff
04 Nov, 2009
New York City

The Fed left its target rate range at historic low between zero and 0.25% and indicated low rates for an extended period of time as long as labor markets are weak and inflation remains low and stable. The dollar drops. Berkshire Hathaway AAA rating may be cut. Hyatt Hotels IPO scheduled tomorrow.

[R]4:30 PM New York, 9:30 PM London, 8:30 AM Sydney – The Fed left its target rate range at historic low between zero and 0.25% and indicated low rates for an extended period of time as long as labor markets are weak and inflation remains low and stable. The dollar drops. Berkshire Hathaway AAA rating may be cut. Hyatt Hotels IPO scheduled tomorrow.[/R]

U.S. stocks closed higher as the Fed left its key lending rate range unchanged and reiterated its plan to leave rates low for an “extended period.” In an unanimous decision the Open Market Committee left the lending rate at a historic low range between zero and 0.25%.

The Fed completed its plan to purchase $300 billion and lowered its plan to purchase agency debt to $175 billion from $200 billion through the first quarter of next year. The Fed still plans to acquire a total of $1.25 trillion agency debt.

The Fed in its accompanying statement cited uneven economic recovery facing high unemployment and low and stable inflation expectations. The dollar edged lower after the rate decision and gold closed at a new high.

Hyatt Hotels Corp is expected to price its 38 million shares offering between $23 and $26 a share as early as tomorrow. The stock is expected to trade under the symbol “H.”

Garmin Ltd plunged 12% after it reported lower than expected revenues but a surprise rise in net. Solera Holdings surged 12% after it lifted its fiscal year earnings outlook. Trucking company Con-way Inc plunged after quarterly revenues and net fell.

European markets closed higher. German automakers gained on higher U.S. sales in October. Societe Generale third quarter earnings doubled. Total SA quarterly net declined 37% on lower refining margin and lower oil price.

UK stocks closed higher after retailers Marks & Spencer and Next plc reported better than expected earnings. Home builders advanced on positive comments from Redrow and Taylor Wimpey. Diageo completed its $500 million bond offering.

Stocks in Mumbai trading closed sharply higher after Finance Minister Mukherjee reiterated that economic stimulus will not be withdrawn. Jaiprakash Associates surged more than 9%. Tata Consultancy and Satyam Computer Services gained on the win of outsourcing contracts in Europe.

North American Markets

Dow Jones Industrial Average increased 30.23 or 0.3% to a close of 9,802.14, S&P 500 Index added 1.09 or 0.3% to 1,046.50, and Nasdaq Composite Index fell 1.80 or 0.1% to close at 2,055.52. Toronto TSX Composite Index increased 17.84 or 0.2% to 11,043.74.

Of the stocks in S&P 500 index, 233 increased, 261 declined and 5 were unchanged.

Molson Coors Brewing led the decliners in the S&P 500 index with a loss of 8.5% followed by losses in AIG of 8.1%, in Genworth Financial of 7.8%, in Baker Hughes of 6.2% and in Goodyear Tire of 6.2%.

MBIA Inc led gainers in the S&P 500 index with a rise of 6.6% followed by gains in DaVita Inc 6.5%, in Merck & Company of 6.4%, in Cigna Corporation of 5.1% and in Aetna Inc of 5.1%.

South American Markets Indexes

Mexico Bolsa Index increased 543.98 or 1.9% to 29,430.51 and Brazil Bovespa Stock Index surged 1,269.34 or 2.1% to 63,912.57.

Argentina Merval Index increased 1.7% and Chile Stock Market Select index added 1.7% and Colombia IGBC General Index advanced 2.2% and Peru Lima General Index added 1.3%.

Europe Markets Review

In London FTSE 100 Index closed higher 81.73 or 1.62% to 5,118.94, in Paris CAC 40 Index increased 93.15 or 2.60% to close at 3,677.40, in Frankfurt DAX index higher 106.05 or 1.98% to close at 5,459.40. In Zurich trading SMI increased 65.55 or 1.05% to close at 6,278.90.

Asian Markets Review

The Nikkei 225 Index in Tokyo closed higher 41.36 or 0.42% to 9,844.31, and Hang Seng index in Hong Kong increased 374.71 or 1.76% to 21,614.77, and CSI 300 index in China higher 18.46 or 0.54% to 3,453.89. ASX 200 index in Australia increased 8.60 or 0.19% to 4,540.10. The FTSE Bursa KL Composite index in Malaysia was higher 11.52 or 0.93% to 1,253.84.

The Kospi Index in South Korea increased 30.01 or 1.94% to close at 1,579.93. SET index in Thailand closed higher 17.93 or 2.68% to 686.41. JSE Index in Indonesia increased 37.75 or 1.62% to 2,371.86. The Sensex index in India increased 507.19 or 3.29% to 15,912.13.

Commodities, Metals, and Currencies

Crude oil increased $0.52 to $80.12 a barrel for a front month contract, natural gas edged down 18 cents to $4.74 per mBtu and gasoline increased 0.66 cents to 200.70 cents.

Soybean future closed down 11.50 cents to $9.99 a bushel. Wheat futures closed up 5.25 cents in Chicago trading to $5.21 a bushel. Sugar closed lower 38 cents 23.59 cents.

Gold increased $7.60 in New York trading to close at $1,092.50 per ounce, silver closed up $0.26 to $17.44 per ounce and copper for the front month delivery increased 2.70 cent to $2.98 per pound.

Dollar edged lower against euro to $1.487 and edged up against the Japanese yen to 90.64.

Yield on 10-year U.S. bonds increased to 3.52% and with 30-year maturities closed higher to 4.40%.