Stocks Snap Back After Fed Statement

Includes: DIA, QQQ, SPY
by: Midnight Trader

4:31 PM, Aug 9, 2011 --

  • NYSE up 362.07 (+5.3%) to 7,258.04
  • DJIA up 429.92 (+3.9%) to 11,239.77
  • S&P 500 up 53.07 (+4.7%) to 1,172.53
  • Nasdaq up 124.83 (+5.3%) to 2,482.52


  • Nikkei down 1.7%.
  • Hang Seng down 5.6%.
  • Shanghai Composite down 0.03%.
  • FTSE-100 down 0.4%.


(+) GLW upgraded.

(+) WFC upgraded.

(+) UA upgraded.

(+) XIN beats estimates, raises outlook.

(+) TA reports improved results vs year ago.

(+) SFI sets buyback.

(+) ATPG beats with sales.

(+) MRK upgraded.

(+) PFE added to Goldman's Conviction Buy list.

(+) UA upgraded.

(+) XIN beats with earnings, raises outlook.

(+) SOL guides for sales miss.


(-) FOSL beats with results but guides for FY miss.

(-) LLNW downgraded.


Stocks take back a portion of the recent slide with a bounce Tuesday. Averages moved in two directions in the immediate wake of the Federal Reserve statement, most recently moving in positive territory. Short-term Treasury yields dropped by the most they have all year.

The Federal Reserve offered some clarification to its previous guidance on leaving interest rates accommodative for an extended period of time. The Fed now says it is likely to leave U.S. rates on hold until at least mid-2013. But such a position sparked some dissension among members.

The Federal Open Market Committee also said it had spoken about a range of tools to help the economy and was ready to employ "as appropriate."

Commodities finished higher although crude oil futures finished in the red after the Federal Reserve released its statement on monetary policy. Gold ended at a new record.

In its statement, the Federal Reserve's Open Market Committee said it sees inflation moderating with the drop in commodity prices. The Fed said it would keep rates low at least through mid-2013.

Oil fell to a value not seen since September. Light, sweet crude for September delivery finished down 2.5% to $79.30 a barrel.

Meanwhile, gold futures advanced to yet another record finish on the back of a weaker dollar. Gold for August delivery finished up 1% to $1,743 an ounce. In other metal futures, silver was down 4.0% to $37.79 a troy ounce while copper traded down 0.58% to $3.93.

In company news:

Shares of Biogen Idec (NASDAQ:BIIB) and Abbott Laboratories (NYSE:ABT) were mixed after the companies announced positive top-line results from the first trial for their drug Daclizumab HYP in relapsing-remitting multiple sclerosis. The study demonstrated significant reductions in annualized relapse rate and that it meets key secondary endpoints.

Shares of Citigroup (NYSE:C) are surging, paring some of their heavy prior-session losses. Citigroup CEO Vikram Pandit said the bank has "unparalleled resources" to withstand the market upheaval, Bloomberg reported. In his comments, Pandit said the current market turmoil is different from that during the financial crisis.

Ford (NYSE:F) is up 9.21% to $10.85, after the company said its July sales totaled 180,865 vehicles, up 9% versus a year ago - driven by 13% higher Ford brand sales and 40% higher sales for Lincoln.

Meanwhile, shares of Pfizer (NYSE:PFE) are higher after Bloomberg reported that Nestle may be putting together a bid for the drug maker's baby-food division. The move comes as Nestle is said to be looking to foster momentum in China. the move would push Nestle to No. 3 from No. 6 in China's infant-nutrition market, the report said. Also this morning, Goldman Sachs upgraded Pfizer to Conviction Buy from Buy. It has a price target of $22.

Bank of America (NYSE:BAC) is up after Chief Financial Officer Bruce Thompson told Nomura Holdings Inc. analysts that the bank won't need to raise extra capital to meet new international standards, Bloomberg reported.

Shares of Apple (NASDAQ:AAPL) are seeing support after Bloomberg reported the computer maker's patent-infringement complaint against HTC Corp. will receive a review from a U.S. trade agency that has the power to block imports of HTC's mobile phones and tablet computers. Apple has accused HTC of infringing on five patents connected to software architecture and user interfaces on portable devices, the report said.

Commodities were mixed. December gold contracts are up 1.61% to $1,740 an ounce while September crude oil contracts are up 1.51% to $82.57 a barrel.

In energy ETFs, the United States Oil Fund (NYSEARCA:USO) is up 2.28% to $32.06 and the United States Natural Gas fund (NYSEARCA:UNG) is up 1.9%, to $10.17.

In precious metal ETFs, the SPDR Gold Trust (NYSEARCA:GLD) is up 1.23% at $169.17. Market Vectors Gold Miners (NYSEARCA:GDX) is up 1.26% to $56.14. iShares Silver Trust (NYSEARCA:SLV) is down 2.63% to $36.97.