USA: U.S. indexes end flat on Tuesday as the United States Federal Reserve suggests it is preparing to do more to help the ailing economy
Record ID:
186943
USA: U.S. indexes end flat on Tuesday as the United States Federal Reserve suggests it is preparing to do more to help the ailing economy
- Title: USA: U.S. indexes end flat on Tuesday as the United States Federal Reserve suggests it is preparing to do more to help the ailing economy
- Date: 22nd September 2010
- Summary: NEW YORK CITY, NEW YORK. UNITED STATES (SEPTEMBER 21, 2010) (REUTERS) (SOUNDBITE) (English) LAKSHMAN ACHUTHAN, MANAGING DIRECTOR OF ECONOMIC CYCLE RESEARCH INSTITUTE, SAYING: "They were acknowledging, "look things have been slowing quite a bit." The market mood has changed a little bit in recent weeks with mixed data, as opposed to always downbeat data. And maybe that allows them to do this in smaller steps to not say anything quite too bold here."
- Embargoed: 7th October 2010 13:00
- Keywords:
- Location: Usa
- Country: USA
- Topics: Finance
- Reuters ID: LVA2N8G7CXOPIYRHEYY3K0IRMKUW
- Story Text: U.S. stocks ended flat to lower in an erratic session on Tuesday (September 21) after the Federal Reserve inched closer to further steps designed to support the recovery.
Stocks initially popped higher but gave back those gains quickly. Investors had hoped that with recent improvements in economic data, the Fed would issue a more upbeat outlook or clarify the measures it would take to stimulate demand.
The central bank nudged the door wider to pumping more money into the economy but kept overnight interest rates unchanged near zero, as expected.
"They (the Fed) were acknowledging, "look things have been slowing quite a bit." The market mood has changed a little bit in recent weeks with mixed data, as opposed to always downbeat data. And maybe that allows them to do this in smaller steps to not say anything quite too bold here," said Lakshman Achuthan, managing director of Economic Cycle Research Institute in New York City.
With the S&P 500 up about 9 percent this month, investors still felt a conflict whether a move by the Fed would be enough to put the economy on a path to sustainable growth.
The confusion can be seen in disparate classes of investments rallying simultaneously, with bond prices rising alongside stocks in recent days.
Volume picked up after the announcement but was still light, with 8.03 billion shares traded on the New York Stock Exchange, the American Stock Exchange and Nasdaq. Last year's estimated daily average was 9.65 billion shares.
The CBOE Volatility Index, a measure of investor sentiment, climbed 3.9 percent, while declining stocks outnumbered advancing ones on the NYSE by a ratio of almost two to one. On the Nasdaq, eight stocks fell for every five that rose.
The Dow Jones industrial average was up 7.41 points, or 0.07 percent, at 10,761.03. The Standard & Poor's 500 Index was down 2.93 points, or 0.26 percent, at 1,139.78. The Nasdaq Composite Index was down 6.48 points, or 0.28 percent, at 2,349.35.
The Dow was lifted by heavy machinery maker Caterpillar Inc, which climbed 2.2 percent to $76.39 (USD).
After the market's close, software company Adobe Systems Inc fell 11 percent to $29.62 (USD) in extended trading. The company reported its third-quarter results and gave an outlook.
Online auction site eBay Inc rose 2 percent after it forecast third-quarter earnings near the high end of its outlook.
The government said U.S. housing starts increased in August to their highest level in four months, while permits for future construction rose, suggesting the embattled housing market was starting to stabilize.
The Dow Jones home construction index added 0.8 percent, and homebuilder D.R. Horton Inc rose 0.9 percent at $11.14 (USD) .
In Monday's (September 20) session, the S&P 500 broke through a key technical range to close at a four-month high, though some analysts were skeptical about Monday's breakout above 1,130, the upper end of a range that has persisted since June. - Copyright Holder: REUTERS
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