Fed Edges Half Point: Stocks Flat
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The markets climbed out of bed on the right side of a relief rally today, sparked by news of soft April CPI numbers, showing a 0.2% increase. That was in-line with consensus views, but then came the real circus sideshow in late-afternoon trade. The Federal Reserve edged interest rates by a half point, something traders had already factored into the market. It was the post-game comments that left fence-sitters undecided.
The markets read the statements to mean the Fed remained on inflation watch, with a bias toward additional rate increases. For the remainder of the trading day, investors digested the news and started factoring in further tightening by the Fed.
Blue chips ebbed and flowed around the Fed move but held onto strong gains that saw Dow 11k within a stone's throw, rocketing 126.79 to 10,934.57. Tech stocks had some giddy-up as the Nasdaq rolled 109.92 to 3,717.57.
Nothing like a little news of a Saudi prince investing a billion dollars into beaten down tech stocks to send the sector higher. Alwaleed bin Talal announced a basket of bargain Internets in his portfolio, and shares in those companies took off sending the ISDEX up 4.08% on the day.
leapt 3 to 59-1/16. Investors bid online auctioneer eBayhigher by 7-3/8 to 134-7/8, while InfoSpacerallied 2 to 60. DoubleClickmoved into positive territory, up 5-1/16 to 59-13/16, while B2B incubator Internet Capital Groupsoared 5-7/16 to 35-9/16.
Abby Joseph Cohen spent most of the morning cheerleading tech stocks with bullish comments. The Goldman Sach's investment committee co-chairwoman said she sees continued gains through the remainder of the year but more grounded to reality.
Lycossmartly sealed a $12.5 billion merger deal with Spanish ISP Terra Networksafter the bell. The price looked right for the portal firm, and investors cheered news of the deal. The combined concern would create the fourth largest Web company in the world. Shares roared to levels not seen since earlier this year, up 11 to 72-5/8. In after-hours, Lycos shares continued to inch forward, up 7/8.
Shares of Coreltacked on 19/32 to 6, following news of the Linux issue's scrapped plans to merge with Inprise. Corel shares have taken a bath in the months since the deal was first announced, shredding the offering price by more than a billion dollars. Despite facing nearly $30 million in termination fees, both companies split amicably to avoid the charges.
Commerce Onetacked on 2-5/8 to 49-1/4, after the B2B company announced a joint venture with QAD. The alliance will offer access and integration to mid-market and multinational manufacturers in QAD's target markets using Commerce One's e-procurement applications.
Shares of Critical Pathreceived a boost, jumping 7-15/16 to 46-15/16, after Donaldson, Lufkin & Jenrette initiated coverage on the e-postmaster general with a "buy" rating and a $70 target price.