Warren Buffett“A public opinion poll is no substitute for thought.”
Adlin Sinclair“Success is a welcomed gift for the uninhibited mind.”
Fed, techs lift Wall St; futures cheer Obama (Reuters)
NEW YORK (Reuters) –
Stocks rose on Wednesday after the U.S. Federal Reserve pledged to keep interest rates near zero and
struck a conciliatory tone on banks in his State of the Union speech.
Stock index futures shot up in late after-hours trading as Obama pushed job creation to the top of his agenda to bring down high unemployment, proposing the use of $30 billion of
repayments to boost lending to small businesses.
anew after days of heightened unease about restrictions on bank risk-taking that Obama proposed last week, which helped fuel a global market sell-off.
Financial shares were poised to be among the standouts heading into Thursday's session.
“In my opinion he articulated the crowning achievement of his administration so far, which is the stabilization of our banking system. I think he articulated that very well and why that's important and that this country's banking system is no longer on the brink,” said Haag Sherman, co-founder and chief investment officer of Salient Partners, an investment firm in Houston.
“As it relates to pushing stock futures higher tomorrow, I think that maybe there's some degree of relief that there weren't more radical proposals that came out of this
. It was largely conciliatory and somewhat balanced.”
futures rose about 0.7 percent or 8 points and were above
, a formula that evaluates pricing by taking into account interest rates, dividends and time to expiration of the contract.
futures gained 0.5 percent or 55 points, and Nasdaq 100 futures added 0.6 percent or 10.50 points.
Obama also promised not to abandon his struggling overhaul of the healthcare system, making it likely that healthcare stocks would also be in the spotlight on Thursday. The backdrop for the speech was the Democrats' loss of the 60-vote hold in the Senate after a Republican upset victory in Massachusetts last week.
Ahead of Obama's speech, U.S. stocks had garnered a late surge as technology shares advanced after
.O), a technology bellwether, unveiled the iPad, its new portable computer.
Market analysts said the Fed's rate decision was not surprising, but the somewhat more optimistic tone of its accompanying statement shifted sentiment after a wave of unexpected news from Washington the past two weeks caused the stock market to buckle.
The Fed offered a more guardedly upbeat view of the U.S. economy than previously, and appeared to put more faith in the sustainability of a nascent economic rebound.
“The market rallied because there wasn't anything overtly negative that could be taken from the Fed statement,” said Michael James, senior trader at
in Los Angeles.
The Dow Jones industrial average (.DJI) gained 41.87 points, or 0.41 percent, to end at 10,236.16.
& Poor's 500 Index (.SPX) rose 5.33 points, or 0.49 percent, to 1,097.50. The
(.IXIC) climbed 17.68 points, or 0.80 percent, to 2,221.41.
,
.O) tumbled 8.9 percent to $43.00 after the biggest maker of cellphone chips cut its revenue estimate for the first quarter and current fiscal year, citing a slow economic recovery.
During the regular session, Apple's shares rose 0.9 percent to $207.88, reversing course from a drop of more than 3 percent earlier in the day after the company unveiled its iPad tablet computer.
.O), which jumped 7.1 percent to $48.04 after the
posted fourth-quarter earnings that topped Wall Street's estimates and forecast a sales increase of about 10 percent for 2010. The NYSE Arca Biotech index (.BTK) gained 1.3 percent.
.N) was the
's top advancer, up 7.3 percent at $61.93, after the world's second-largest aircraft manufacturer reported stronger-than-expected
and forecast a profitable 2010.
.N) and
.N) slipped after giving cautious forecasts.
Caterpillar's shares slid 4.3 percent to $53.44, while United Tech's stock lost 1.3 percent to $67.61.
, with about 1.3 billion shares changing hands, below last year's estimated daily average of 2.18 billion. On the Nasdaq, about 2.49 billion shares traded, above last year's daily average of 1.63 billion.
Advancing stocks just barely outnumbered declining ones on the New York Stock Exchange, with 1,517 shares rising and 1,515 falling.
On the Nasdaq, the winner's advantage was more pronounced, with about 16 stocks rising for every 11 that fell.