Strong rally at Wall Street
Stocks at Wall Street managed a strong end with good gains on Wednesday, 28 January, 2009. Financials led the way today as Wells Fargo decided that it will keep its dividend intact and will not ask for additional TRP funds. Stocks also rose today after Federal Reserve's latest policy statement.
The Dow Jones Industrial Average ended higher by 200 points at 8,375, the Nasdaq closed higher by 53 points at 1,558 and the S&P 500 closed higher by 28 points at 874.
Citigroup, Wells Fargo and Bank Of America were the main Dow winners today.
In the earning arena today, Boeing and AT&T reported unimpressive quarterly results. WellPoint's latest earnings were in-line with expectations. Yahoo! and ConocoPhillips both topped earnings estimates.
Today, The Federal Open Market Committee kept its interest rate target in a range of zero to 0.25%, as expected. It said it would continue to flood the financial system with money. Regarding the economy, the Fed admitted that the economy was in worse shape than in its prior meeting in December. But a gradual recovery will begin later this year. The central bank stressed that deflation was the biggest concern
The Fed also stated it continues to purchase large quantities of agency debt and mortgage-backed securities. Such a move helps put cash back into the system, and helps support the mortgage and housing markets. The FOMC stated it is prepared to purchase longer term securities if evolving circumstances indicate that it would be effective in improving conditions in credit markets.
Crude prices ultimately ended higher on Wednesday, 28 January, 2009 after dropping earlier during the day. Prices went lower after weekly inventory report showed build up in crude inventories for fifth straight week. Later prices went up after Fed came out with its latest statements on US economy.
On Wednesday, crude-oil futures for light sweet crude for March delivery closed at $43.6/barrel (higher by $2.2 or 4%) on the New York Mercantile Exchange. Last week, crude prices ended higher by 9%. Prices had reached a low of $41 earlier during the day today.
The earning reports for tomorrow will feature quite a few big names like 3M and Altria. Among economic reports, December Durable Goods Orders and initial weekly jobless claims are due tomorrow morning before opening bell. December New Home Sales are scheduled to follow after that.
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