The Herald Bulletin

Overnight Update

Nation & World

July 30, 2013

Stocks rise modestly as Fed begins meeting

NEW YORK —  Stocks rose modestly in morning trading on Wall Street Tuesday after several big companies turned in solid earnings.

The Dow Jones industrial average was up 11 points, or 0.1 percent, to 15,533 as of 11 a.m. Eastern Daylight Time.

The Standard & Poor's 500 index was up four points, or 0.2 percent, to 1,689. Seven of the index's 10 industry sectors rose, led by and technology stocks.

The Nasdaq composite rose 18 points, or 0.5 percent, to 3,617.

Goodyear Tire & Rubber jumped $1.70, or 10 percent, to $18.74, the biggest gain in the S&P 500 index, after reporting that its second-quarter earnings more than doubled. Sales in Latin America rose sharply.

Jim Dunigan, chief investment officer of PNC Wealth Management, said investors have been encouraged by a recent pickup in mergers and acquisitions, including Monday's blockbuster deal combining Publicis Groupe and Omnicom Group to create the world's largest advertising firm.

The resurgence in corporate deals "gives investors confidence to make purchases at these levels," Dunigan said. "When you see others buying, it gives people a sense that they're not making a mistake."

Investors were also keeping a close eye on the Federal Reserve. The central bank began a two-day policy meeting Tuesday.

The Federal Reserve has been buying $85 billion in bonds every month to keep interest rates low and encourage borrowing and hiring. The Fed has said it might start to pull back on the stimulus later this year if the economy continues to improve, but the timing remains uncertain.

The Fed has also kept its benchmark short-term interest rate close to zero and has said it would stay there until the unemployment rate dips below 6.5 percent. The rate currently stands at 7.6 percent.

Crude oil fell $1.42 to $103.12 a barrel in New York. The price of gold fell $3.30 to $1,325.10 an ounce. The dollar edged higher against the euro and the Japanese yen.

The yield on the benchmark 10-year Treasury note inched down to 2.59 percent from 2.60 percent the day before.

Among other stocks making big moves:

— Pfizer rose 42 cents, or 1.5 percent, to $29.97 after the pharmaceutical company reported that its income more than quadrupled, helped by the sale of its animal health business.

— Masco jumped $1.33, or 6.7 percent. The home furnishings company posted earnings that beat the forecasts of financial analysts as the company benefited from a surge in home construction.

— Time Warner Cable fell 94 cents, or 0.8 percent, to $114.26. The giant cable company is enmeshed in a nasty fee dispute with CBS over programming fees and is threatening to pull the broadcaster off its systems.

— Coach slumped $5.26, or 9 percent, to $52.59 after the upscale handbag maker reported a 12 percent drop in fourth-quarter profit as its home market of North America remained weak. Coach also said two more executives were leaving the company.

 

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