US stocks mixed after Fed keeps interest rates low
Thursday, 31 July 2014
Wall Street stocks on Wednesday finished mixed after the US Federal Reserve kept interest rates near zero and government data showed surprisingly strong 2nd-quarter US economic growth. The Dow Jones Industrial Average fell 31.75 points (0.19 per cent) to 16,880.36, while the tech-rich Nasdaq Composite Index gained 20.20 (0.45 per cent) to 4,462.90. The broad-based S&P 500 essentially split the difference, rising a mere 0.12 (0.01 per cent) to 1,970.07. Stocks opened higher after the Commerce Department reported that 2nd-quarter growth was 4.0 per cent and trimmed the size of the 1st-quarter contraction. But the Dow and S&P 500 tilted into negative territory at mid-morning before rallying somewhat after the Fed interest-rate decision at 1800 GMT. Banking stocks rose, including Citigroup (+1.2 per cent), Dow component JPMorgan Chase (+0.5 per cent) and Wells Fargo (+1.1 per cent). Bank of America gained 1.6 per cent even as a US judge ordered it to pay a $1.3 billion penalty in a mortgage fraud case. Twitter bolted 20 per cent higher after revenues more than doubled from a year ago to $312 million in the three months that ended June 30, with the number of monthly active users hitting 271 million, up 24 per cent year-over-year. Online shop and hotel listing service Yelp rose 8.8 per cent after reporting 2nd-quarter earnings of $2.7 million compared with a loss of $878,000 in the year-ago period. Goodyear Tire & Rubber fell 8.0 per cent as 2nd-quarter earnings of 80 cents per share beat expectations by a penny but revenues came in at $4.7 billion, below the $4.75 billion projected by analysts. Biotechnology company Amgen rose 5.4 per cent as it announced it will cut between 2,400 and 2,900 jobs, mostly in the US. Earnings for the second quarter rose 23 per cent to $1.5 billion. Bond prices fell. The yield on the 10-year US Treasury rose to 2.55 per cent from 2.46 per cent on Tuesday, while the 30-year advanced to 3.31 per cent from 3.22 per cent. Bond prices and yields move inversely, according to AFP.