The stock markets in the United States once again recorded gains as the Federal Reserve’s Beige Book indicated that the country’s economy recovered from declines related to the severe weather conditions. Eight of the 12 districts of the central bank described the economic expansion as modest or moderate.
According to the Beige Book, “Consumer spending increased in most districts as weather conditions improved and foot traffic returned.” In addition, the document indicated that the housing situation in the country is mixed with higher prices, but low inventories.
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Earlier today, Federal Reserve chairperson Janet Yellen reiterated the central bank’s commitment to maintaining low interest rates even if it scales back its monthly bond-buying program.
Jim Russell, a senior equity strategist at U.S. Bank Wealth Management told Bloomberg, “The macro data continues to come in reasonably firm and we don’t think valuations on the stock side suggest we’re overdone. The market is finding some sort of natural trading level to bounce out of and we’re seeing slightly better-than-expected earnings and second-quarter outlooks from management that seem to be encouraging.”
A separate report showed that China, the second largest economy in the world, expanded at an annualized rate of 7.4% during the first quarter of this year. Its growth rate was higher than the estimate of economists. The growth rate of its gross domestic product (GDP) is still at its slowest pace since the third quarter of 2012.
Investors are also monitoring the developments in the ongoing conflict between Ukraine and Russia. The United States and its European allies threatened to implement new sanctions against Russia. Diplomats from the European Union, Russia, Ukraine, and the United States will hold discussions in Geneva tomorrow.
- Dow Jones Industrial Average (DJIA)- 16,424.23 (+1.29%)
- S&P 500- 1,862.85 (+1.00 %)
- NASDAQ- 4,086.23 (+1.29%)
- Russell 2000- 1,131.49 (+1.07%)
- EURO STOXX 50 Price EUR- 3,139.26 (+1.54%)
- FTSE 100 Index- 6,584.17 (+0.65%)
- Deutsche Borse AG German Stock Index DAX- 9,317.82 (+1.57%)
Asia Pacific Markets
- Nikkei 225- 14,417.68 (+3.01%)
- Hong Kong Hang Seng Index- 23,003.64 (-0.79%)
- Shanghai Shenzhen CSI 300 Index- 2,232.53 (+0.14%)
Stocks in Focus
The stock price of Bank of America Corp (NYSE:BAC) declined nearly 2% to $16.13 per share after the bank reported first quarter losses after settling claims on mortgage bonds. The bank posted a $276 million loss or $0.05 per diluted share. During the same quarter last year, Bank of America generated $1.48 billion profit or $0.10 per diluted share. The bank said its net revenue was $22.77 billion, down from $23.41 billion in the year-ago quarter.
The shares of CSX Corporation (NYSE:CSX) fell 1.77% to $27.79 a share after the second largest railroad operator in Eastern United States projected that it will achieve a “modest” earnings growth this year. The company also expressed uncertainty whether 2015 is strong enough to generate a two-year compound annual growth rate in the range of 10% to 15%.
Yahoo! Inc. (NASDAQ:YHOO) gained more than 6% to $36.35 per share after the company showed potential signs of growth; its investments in Alibaba Group Holding Ltd and Yahoo Japan contribute significant amounts in its revenue. The company reported $0.38 earnings per share on $1.09 billion revenue, higher than the $0.37 earnings per share on $1.08 billion revenue estimated by analysts.