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US close: Wall Street rises after Fed predicts gradual rate hikes

18 Jun 14

LONDON (ShareCast) - - S&P 500 hits new record
- Fed cuts 2014 economic growth forecast
- Yellen further tapers quantitative easing
- Iraq leaders urge US to launch air strikes on militants

DJIA: +98.13, 0.58%
NASDAQ: +26, 0.59%
S&P 500: +15, 0.77%

Wall Street closed nearly 100 points higher and the S&P 500 hit another record after the Federal Reserve signalled interest rates may rise slightly faster from 2015. But it held out the prospect of lower longer-term rates than previously forecast.

The Dow Jones industrial average rose 98.13 points or 0.58%, to 16,907, the S&P 500 gained 15 points or 0.77%, to 1,957 and the Nasdaq Composite added 26 points or 0.59%, to 4,363.

After a two-day policy meeting, the Fed cut the 2014 economic growth forecast to a range of between 2.1% and 2.3% from about 2.9%.

The central bank further tapered quantitative easing as expected, reducing monthly bond buys by $10bn, taking the total to $35bn, in line with plans to wind down one of its main stimulus programmes by the end of 2014.

The indication of faster rate rises followed Tuesday’s release of the latest US inflation data, which showed prices rose more than forecast.

In March, policy makers estimated that the interest rate, now close to zero, would rise to 1% at the end of 2015 and to 2.25% a year later.

Senior Economist at Berenberg Bank, Christian Schulz, said: "We continue to expect the US economy to do well enough for the Fed to end the asset purchases in October and start gradually hiking rates in Q2 2015.

"However, today's slightly more dovish tone was a reminder that the Fed would react if growth disappointed or inflation failed to follow the projected gradual upward path."

US consumer prices rose by 0.4% month-on-month and 2.1% year-on-year in May, surpassing analysts' estimates.


Iraq formally urged the US to launch air strikes against militants who have seized several key cities.

"We have a request from the Iraqi government for air power," the BBC reported top US military commander Gen Martin Dempsey as telling US senators.

Earlier the Sunni insurgents launched an attack on Iraq's biggest oil refinery at Baiji north of Baghdad.

Iraq's military said it had repelled the attack, military spokesman Qassim al-Moussawi told Associated Press, although there was no independent confirmation of his claims.

Oil majors BP and ExxonMobil evacuated staff from Iraq amid the turmoil.

The news comes as the government fights the Islamic State in Iraq and the Levant (ISIS) and its Sunni Muslim allies in Diyala and Salahuddin provinces, after they took over the second city, Mosul, last week.

West Texas Intermediate crude futures fell $0.16 to $106.2 per barrel after fears that the crisis could hurt oil supplies fuelled rises.

Adobe, FedEx, Amazon

Photoshop and Acrobat software maker Adobe Systems advanced as the company reported a rise in sales and profit in the three months to end of May, exceeding analysts’ estimates.

Parcel courier FedEx gained as it posted fiscal fourth-quarter earnings of $2.46 a share, beating forecasts of $2.36.

Shares in online retailer climbed after Chief Executive Jeff Bezos unveiled a "Fire" smartphone with free, unlimited photo storage, throwing down the gauntlet to rivals in that market Apple and Samsung.

ConAgra declined as the packaged food company cut its earnings forecast amid slow sales of consumer foods and shrinking profit at its private-label business.

Cisco jumped as Morgan Stanley rated the San Jose, California-based company with an ‘overweight’ recommendation.

The US 10-year yield fell 0.07 to 2.59. Gold prices rose 0.4% to $1,277 an ounce.


S&P 500 - Risers
Adobe Systems Inc. (ADBE) $73.08 +8.20%
Air Products & Chemicals Inc. (APD) $130.72 +7.50%
FedEx Corp. (FDX) $148.95 +6.16%
Autodesk Inc. (ADSK) $56.96 +4.27%
Cliffs Natural Resources Inc. (CLF) $14.77 +4.16%
Walgreen Co. (WAG) $76.08 +4.08%
Medtronic Inc. (MDT) $63.77 +3.56%
Franklin Resources Inc. (BEN) $58.16 +3.54%
Expedia Inc. (EXPE) $80.35 +3.52%
Lorillard Inc. (LO) $63.83 +3.35%

S&P 500 - Fallers
ConAgra Foods Inc. (CAG) $30.47 -7.25%
Coach Inc. (COH) $39.19 -3.97%
Express Scripts Holding Co (ESRX) $68.29 -2.23%
Vertex Pharmaceuticals Inc. (VRTX) $65.08 -1.23%
Adt Corp (ADT) $34.43 -1.09%
FMC Corp. (FMC) $75.00 -1.06%
Flowserve Corp. (FLS) $76.86 -1.04%
Rowan Companies plc (RDC) $32.29 -1.04%
Analog Devices Inc. (ADI) $55.13 -1.02%
Rockwell Automation Inc. (ROK) $125.69 -0.98%

Dow Jones I.A - Risers
Coca-Cola Co. (KO) $41.56 +1.56%
Nike Inc. (NKE) $76.21 +1.49%
Unitedhealth Group Inc. (UNH) $79.21 +1.33%
Chevron Corp. (CVX) $130.28 +1.13%
Goldman Sachs Group Inc. (GS) $169.86 +0.97%
American Express Co. (AXP) $95.56 +0.95%
Wal-Mart Stores Inc. (WMT) $75.70 +0.95%
Johnson & Johnson (JNJ) $102.81 +0.86%
Home Depot Inc. (HD) $80.71 +0.86%
Pfizer Inc. (PFE) $29.71 +0.78%

Dow Jones I.A - Fallers
Microsoft Corp. (MSFT) $41.65 -0.07%
Intel Corp. (INTC) $29.93 -0.07%

Nasdaq 100 - Risers
Adobe Systems Inc. (ADBE) $73.08 +8.20%
Autodesk Inc. (ADSK) $56.96 +4.27%
Expedia Inc. (EXPE) $80.35 +3.52%
Amazon.Com Inc. (AMZN) $334.38 +2.69%
Sirius XM Holdings Inc (SIRI) $3.45 +2.37%
NetApp Inc. (NTAP) $36.47 +2.13%
CH Robinson Worldwide Inc (CHRW) $63.53 +2.07%
Vodafone Group Plc ADS (VOD) $33.78 +1.87%
Facebook Inc. (FB) $65.60 +1.86%
Google Inc. (GOOGL) $560.66 +1.82%

Nasdaq 100 - Fallers
Express Scripts Holding Co (ESRX) $68.29 -2.23%
Tesla Motors Inc (TSLA) $227.12 -1.96%
Vertex Pharmaceuticals Inc. (VRTX) $65.08 -1.23%
Analog Devices Inc. (ADI) $55.13 -1.02%
Sandisk Corp. (SNDK) $102.31 -0.90%
F5 Networks Inc. (FFIV) $112.54 -0.90%
Baidu Inc. (BIDU) $176.68 -0.86%
Maxim Integrated Products Inc. (MXIM) $34.79 -0.85%
Texas Instruments Inc (TXN) $47.87 -0.81%
Verisk Analytics Inc. (VRSK) $59.99 -0.65%

Note 1: Prices and trades are provided by Digital Look Corporate Solutions and are end of day values only.


Market Data

Currency US Dollars
52 Week High $35.07
52 Week Low $24.14
Shares Issued 486.09m
Market Cap $14,262m


No dividends found