Indexes faltered to a mixed close Wednesday as slipping crude oil prices and a possibly final interest-rate cut failed to buttress buyers.
The NYSE composite closed 0.2% higher, based on early figures, led by energy stocks.
But the Nasdaq notched a 0.6% loss. The S&P 500 slipped 0.4% while the Dow ended down a fraction.
Preliminary figures showed volume rose across the board, marking the Nasdaq’s second distribution day in recent weeks. It was also a distribution day for the S&P 500. The Dow’s loss was too small to be considered institutional selling.
The Nasdaq slipped despite a 3% jump by Google () as other tech stocks tumbled.
Research In Motion () took a pounding, losing 4.66 to 121.63. The smartphone maker appears to be adding another handle to its base.
On the upside, communications chipmaker NetLogic Microsystems () gapped up for a 3.93 gain to 32.79. The company handily topped Q1 consensus. The 14% jump left shares just below a possible buy point at 33.
On the foreign front, Brazil’s Bovespa index rose to a record high, blasting ahead 6.3% after Standard & Poor’s announced it was raising the country’s foreign bond rating. The move gives Brazil’s bonds investment-grade ratings, on par with India, Morocco and Romania, and may help attract additional foreign capital.
Brazilian home builder Gafisa ()jumped 5.89 to 43.55. Companhia Brasileira () added 3.94 to 45.49. Unibanco Holding () spiked up 15.28 to 145.41. Banco Itau Holding () gained 2.28 to 28.05. Banco Bradesco () rose 1.58 to 22.58.
3:15 p.m. Update: Stocks Retreat After Fed Announcement
By VINCENT MAO
The major stock indexes hovered near session highs in late trade Wednesday. Equities extended gains just after the Fed gave the market another rate cut, but they’ve pulled back some.
At 2:51 p.m. EDT, the Dow and Nasdaq were up 1% each. The S&P 500 gained 0.6% and Nasdaq 0.5%.
Volume was tracking higher on both exchanges.
Techne () climbed 2.43 to a near eight-year high of 74.22 in heavy trading. The biotech is following through after clearing a 71.52 buy point from a base-on-base pattern Tuesday.
Cummins () powered up 4.75 to 62.24 in heavy trade. Earlier today, the engine maker topped views with a 37% jump in Q1 earnings. That was its best performance in several quarters. Cummins is building a potential cup base.
On the downside, Cash America International () dropped 4.25 to 40.90 in busy trading. But it bounced from a session low of 38.30. Jefferies & Co. cut the pawnshop operator to hold from buy, citing valuation.
2:30 p.m. Update: Fed Cuts Rates As Expected
By ED CARSON
The Federal Reserve cut the fed funds rate by 25 basis points to 2%, as expected, citing weak U.S. economic activity and “stressed” financial markets. But it also cited rising commodity prices and inflation expectations, making the inflation outlook unclear.
The Fed said it expects sharp rate cuts in recent months would support growth, but stood ready to act as needed.
The vote was 8-2, with the dissenters likely favoring no move. Many analysts expect that this would be the last Fed cut of the latest cycle of rate reductions.
Stocks, which were rallying just ahead of the Fed’s action, moved up and down after the news. At 11:24 a.m., the Dow was up 0.9%, while the Nasdaq and S&P 500 rose 0.5%.
1:15 p.m. Update: Indexes Back Off Ahead Of Fed
By VINCENT MAO AND ALAN R. ELLIOTT
Stocks pulled back from session highs by midday Wednesday, ahead of the central bank’s decision on interest rates.
At 12:44 p.m. EDT, the Dow led with a 0.7% gain. A 13% jump in shares of General Motors () on an earnings report boosted the index. The Nasdaq and NYSE composites were up 0.5% each, the S&P 500 0.3%.
The Fed’s interest rate announcement is due at about 2:15 p.m. EDT. A quarter-point cut to 2% is expected.
May crude futures fell an additional $1.88 a barrel, slipping to $113.75. A 3.9-million-barrel increase in weekly inventories was nearly triple the consensus forecast and the 13th increase in the past 16 weeks. Gasoline inventories fell for a seventh straight week.
Crude pegged a record high Monday after the shutdown of some production and a major pipeline outage in the North Sea, along with various production interruptions in Nigeria. Oil dropped nearly 3% on Tuesday after the restart of the North Sea pipeline. It is now 5% off Monday’s high.
CyberSource () climbed 1.99, or 12%, to 18.29 in fast trade. It cleared a 17.66 buy point of a double-bottom base. Volume was tracking more than three times average. It’s in buying range until 18.54. After Tuesday’s close, the provider of online payment services posted a Q1 profit, excluding items, of 16 cents per share. That was 2 cents above views and double year-ago levels. Revenue surged 141% to $53.4 million, also above views.
NetLogic Microsystems () gapped up and rallied 3.40, or 12%, to 32.26. Late Tuesday, the chipmaker reported a 58% jump in first-quarter profit and a 46% rise in revenue. Both were ahead of views. The stock’s Accumulation/Distribution Rating has improved to B from a worst-possible E last month.
Open Text () gapped up and gained 1.67 to 35.65 in fast trade. This morning, the business software maker won two upgrades after posting better-than-expected earnings and sales late Tuesday. Research Capital upgraded the business software firm to buy from accumulate. And GMP Securities lifted shares to buy from hold. Both brokers raised their price targets on the stock.
On the downside, Bois d’Arc () gapped down and tumbled 1.95, or 8%, to 24.03 in huge trade. The oil and gas producer dropped despite news that it would be acquired by Stone Energy () in a deal valued at $1.8 billion. Stone shares tumbled 9%.
11:15 a.m. Update: Indexes Hold Ground In Mixed Volume
By ALAN R. ELLIOTT
Indexes clung to highs after an early jump spurred by earnings wins across a broad range of sectors.
The NYSE composite held a 0.7% gain, and the Nasdaq stuck with a 0.6% advance at 10:53 a.m. EDT. International issues led the NYSE’s upside, while biotechs scored solid gains for the Nasdaq. The S&P 500’s 0.4% rise lagged the Dow’s 0.7%. Citigroup () pulled both indexes lower.
Advancing stocks led decliners by better than 3-to-2 on both exchanges. Trading volume was lower on the NYSE, slightly higher on the Nasdaq.
Stocks were deeply mixed across Asia. The Shanghai composite bolted 4.8% as banks and insurers drove higher on solid Q1 earnings reports. Hong Kong’s Hang Seng index slipped 0.6% ahead of a holiday Thursday.
In Europe and the U.K., indexes recovered from early losses and had posted moderate gains in late trading.
The April Chicago Purchasing Managers’ Index, a broad gauge of manufacturing activity in the Midwest region, came in better than expected. The 48.3 reading was still below the crucial boom-bust 50 mark that would begin to indicate economic expansion. But it was the index’s third monthly gain after slipping to a six-year low in February.
Monolithic Power Systems () amped up for a 1.20 gain to 22.42. The semiconductor chip maker reported Tuesday it neatly topped Q1 views and said it planned to restate some prior tax figures to lower levels. The move broke shares above a 22.03 buy point from a handle in a six-month, double-bottom base. Cummins Diesel () powered ahead 5.38 to 62.87 after plowing over Q1 sales and earnings views.
Private college educator Strayer Education () jumped 16.18 to 196.07 on powerful volume. It, too, topped Q1 EPS views and upped Q2 guidance above consensus. The gap-up move launched the stock above the 196.01 buy point from a five-month cup-shaped base.
10:15 a.m. Stocks Rise On Mixed Volume
By VINCENT MAO
Stocks opened to the upside Wednesday and tacked on more gains ahead of this afternoon’s decision on interest rates.
At 9:54 a.m. EDT, the NYSE composite had gained 0.6% and the Dow 0.5%. The Nasdaq and S&P 500 each rose 0.4%.
Volume was tracking mixed, with NYSE higher and Nasdaq lower.
First Solar () gapped up and rose 13.37, or 7%, to 298.29. That puts the stock 5% past a 283.10 buy point from a cup base. Before the open, the maker of solar modules said Q1 earnings spiked to 57 cents a share, up from 7 cents a year earlier and a dime above views. Sales nearly tripled to $196.9 million, also above views.
Visa () added 1.10 to a new high of 81.98. On Tuesday, the credit card processor staged a huge reversal. Shares fell more than 6% early in the day but bounced back to close up 7%.
Fellow credit care firm MasterCard () extended Tuesday’s 13% pop, with Wednesday morning shares gaining 4.52 to 278.50. It’s now 25% past a 222.35 buy point.
On the downside, Rofin-Sinar Technologies () gapped down and slumped 8.27, or 18%, to 37.67 on huge trade. Before the open, the maker of laser cutting and welding tools posted fiscal Q2 earnings and sales below analysts’ expectations.
Chicago Bridge & Iron () gapped down and tumbled 6.20, or 13%, to 42.11 in heavy trading. The engineering and construction company reported Q1 profit shy of expectations.
9:15 a.m. Update: Stocks Poised For Higher Open
By VINCENT MAO
Stock futures pointed to a higher open Wednesday on better-than-expected GDP data.
Nasdaq futures climbed 6 points vs. fair value, S&P 500 futures gained 3 points and Dow futures rallied 37 points.
In economic news, the ADP Employment Survey predicted 10,000 new private-sector jobs in April.
The jobs report from the Labor Department will be out on Friday. A decrease of 80,000 jobs, both public and private, is seen.
The advanced reading of the first-quarter gross domestic product said the economy grew 0.6%, slightly above economists’ estimates for a 0.5% rise.
The employment cost index rose 0.7%, slightly below forecasts.
Just shortly after the open, the Chicago PMI index for April will be out. Forecasts call for a dip to 47.5.
The weekly energy inventories report is due out at 10:30 a.m. EDT.
Meanwhile, the Fed’s announcement on interest rates is due at 2:15 p.m. EDT. The central bank is widely expected to cut rates to 2% and then halt their string of cuts.
A couple of Dow components reported earnings.
General Motors () climbed 4% in the pre-market after reporting a smaller-than-expected first-quarter loss. The auto giant lost 62 cents a share, excluding items, down from a profit of 17 cents a share the prior year. Sales fell 2% to $42.7 billion, but that was above analysts’ estimates for $40.1 billion. During the quarter, the company faced a number of challenges, including the weak economy an labor strikes.
Procter & Gamble () climbed 3% in pre-open trading after it beat views. The consumer products supplier reported fiscal Q3 earnings of 82 cents a share, up 11% from a year before and a penny above estimates. Sales hit $20.46 billion, also above estimates. P&G raised the lower end of its full-year guidance to a range of $3.48 to $3.50 a share vs. views for $3.50.
Elsewhere, Citigroup () announced late Tuesday that it’s seeking to raise $3 billion through a stock offering to help boost its capital. A day later the company raised the offering to $4.5 billion. Citi has been hurt by huge write-downs tied to the subprime mortgage crisis. Shares fell 3% in the pre-market.
Garmin also fell 3% in pre-open trading after it delivered Q1 earnings and sales below views. The GPS device maker is trading near two-year lows.