Stocks Gain Despite Dell, Fed Rate Hike
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On a day that Dell (NASDAQ: DELL) shares fell nearly 7 percent and the Federal Reserve unexpectedly raised interest rates, stocks somehow managed to end the day with small gains.
Dell's stock tumbled despite a better than expected earnings report, as traders fretted about pricing pressures and PC and notebook competition from HP (NYSE: HPQ).
The day's other bad news was a surprise rate hike by the Federal Reserve, which raised its discount emergency lending rate by a quarter point after a government report showed wholesale inflation pressures. The move initially sent stock futures lower on fears that an overly aggressive Fed could derail the nascent economic recovery, but traders later took the move as a sign of economic strength, and stocks recovered their losses.
Intuit (NASDAQ: INTU) fared much better than Dell, surging 8 percent on a strong earnings report and outlook.
EBay (NASDAQ: EBAY) and Level 3 (NASDAQ: LVLT) were other strong stocks, but the rest of the tech sector traded mixed, with the Nasdaq up 0.1 percent on the day.
Microsoft (NASDAQ: MSFT), Applied Materials (NASDAQ: AMAT), Palm (NASDAQ: PALM), Apple (NASDAQ: AAPL), Seagate (NASDAQ: STX) and Oracle (NASDAQ: ORCL) were some of the stocks finishing lower.