New Dow Record As Fed Trims Stimulus
US markets rose today, with the Dow closing at a new record, as the Federal Reserve said it would continue to trim the pace of its bond purchases as the economy gains momentum.
Wednesday, April 30, 2014 - 00:00
This was all precipitated by the Fed showing faith in US economy with bond-buying reduction of $10 billion. The Dow rose 45.47 points or 0.27 %, to 16,580.84, while the S&P 500 gained 5.62 points or 0.3 %, to 1,883.95 and the Nasdaq added 11.013 points or 0.27 %, to 4,114.556.
The Fed looked past a dismal reading on first quarter US growth and gave a mostly upbeat assessment of the economy's prospects as it announced another cut in its massive bond-buying stimulus. The Fed said it would reduce its monthly bond purchases to $45 billion from $55 billion, a widely expected decision that keeps it on track to end the program as soon as October. The decision was unanimous. The Fed has now reduced its monthly bond purchases by a cumulative $40 billion in four steady steps. The gradual tapering seeks to close an unparalleled era in which the central bank's balance sheet quadrupled to more than $4.2 trillion through three separate purchase programs launched to battle the financial crisis and the recession and slow growth that followed.
In other economic news, the ADP numbers come before data from the Labor Department on May 2. The government’s report may show employers added 215,000 workers in April, the most since November, according to economists’ projections. The Institute for Supply Management-Chicago Inc.’s business barometer rose to 63, the highest since October, from 55.9 in March, according to a report today. A reading above than 50 signals expansion. The median forecast of 49 economists surveyed by Bloomberg was 57. MetLife Inc. and Williams Cos. are among S&P 500 companies scheduled to report earnings today. Some 75% of the 310 S&P 500 members that have reported earnings this season have posted profit that exceeded analysts’ estimates. About 52% beat sales projections, according to the data compiled by Bloomberg. Investors added $3.1 billion to US equity exchange-traded funds yesterday, the biggest single-day inflow since April 8, while health-care stocks absorbed the most money among industry ETFs, taking in $177 million and paring its five-day net outflow to $399 million.
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