NEW YORK (CNN/Money) -
The Nasdaq gained Wednesday, while the broader market was mixed a day after the Fed hinted that interest rates will rise, but not too soon. This stance put the focus on Friday's employment report for clues as to when the hike might come.
The Nasdaq composite (up 6.70 to 1957.26, Charts) added 0.35 percent, the Standard & Poor's 500 (up 1.90 to 1121.53, Charts) index rose 0.2 percent and the Dow Jones industrial average (down 6.20 to 10310.95, Charts) closed just below unchanged.
"We've got a lot of things going on right now in the market, but the main focus is on the non-farm payrolls report Friday," said Gary Wolfer, senior portfolio manager at Univest Wealth Management and Trust.
The Federal Reserve on Tuesday kept the federal funds rate steady at 1.0 percent, a more than 40-year low, as had been expected. But the central bank also hinted that interest rates are set to rise this year, leaving investors to ponder when.
Fed funds futures indicate a strong likelihood that the key overnight lending rate will inch up by a quarter-percentage point in August. But some Fed watchers say this could happen as soon as next month.
The economic news over the next few weeks is bound to provide some clarity, analysts say, starting with Friday's payrolls number.
After a surprisingly strong reading last month, any sign that the labor market has finally begun a steady recovery could be interpreted as a signal that the Fed may speed up its first rate hike in more than four years.
Employers are expected to have added about 165,000 jobs to their payrolls in April, according to a consensus of economists surveyed by Briefing.com, after having added 308,000 new jobs last month. The unemployment rate is expected to hold steady at 5.7 percent, unchanged from last month.
"People are starting to move from factoring in a 25 basis point rise to expecting a 50 basis point rise," said Mark Bryant, senior vice president at Brean, Murray & Co. "If Friday's number is particularly strong, people may take that as a sign that rates will rise as soon as at the June meeting."
Alternately, if Friday's numbers are particularly weak, that would seem to confirm that a rate hike is still a few months away.
"A lot of the gains in March were related to seasonal issues and California grocers going back to work," Wolfer said. "The April number won't be as strong, and the Fed's going to need to see a few months of strong jobs growth before it raises rates."
Economic reports due ahead of April's jobs numbers include Thursday's weekly jobless claims report, expected to show that 335,000 Americans filed new claims for unemployment, according to Briefing.com estimates, down from 338,000 the previous week.
Also due Thursday morning is the initial read on first-quarter productivity, expected to have risen to an annual rate of 3.5 percent from a rate of 2.6 percent in the fourth quarter.
What moved?
Shares of Charter One Financial (CF: up $7.91 to $43.86, Research, Estimates) surged 22 percent in active New York Stock Exchange trade after Charter One agreed to a $10.5 billion buyout offer from the U.K.'s Royal Bank of Scotland.
Security stocks were again on the rise on the Nasdaq, with investors bidding up Mace Security International (MACE: up $2.60 to $5.92, Research, Estimates) after the company reported earnings of 2 cents a share, a penny less than a year ago, on revenue that grew from a year ago. Mace shares added more than 80 percent and brought IPIX (IPIX: up $2.20 to $8.29, Research, Estimates) and others along for the ride.
Dell (DELL: up $0.40 to $35.71, Research, Estimates) edged higher after Banc of America Securities upgraded it to "buy" from "neutral" and raised its 12-month price target. It also boosted Dell's fiscal 2005 and 2006 earnings estimates. The brokerage said its sees upside in Dell's earnings and margins.
Shares of Coca-Cola (KO: up $0.82 to $51.09, Research, Estimates) gained after the company ended a long-running leader search late Tuesday by naming retired Coke veteran Neville Isdell to be its next chairman and chief executive.
Walt Disney (DIS: down $0.02 to $23.00, Research, Estimates) closed little changed after news broke that the company may try to block the distribution of a documentary by Oscar-winning filmmaker Michael Moore linking President Bush with powerful Saudi families, including that of Osama bin Laden. The film is set to make its debut at the Cannes Film Festival later this month.
On the downside, Ligand Pharmaceuticals (LGND: down $3.30 to $18.30, Research, Estimates) fell 15.5 percent in active Nasdaq trade after the drug maker posted a quarterly loss that narrowed from a year earlier but was steeper than what analysts had been expecting.
Market breadth was decisively positive. On the New York Stock Exchange, where 1.45 billion shares traded, advancers outnumbered decliners by four to three. On the Nasdaq, this ratio stood at five to four on volume of 1.56 billion shares.
In the latest strong news on the economy, the Institute for Supply Management released its report on the services sector of the economy. The services index rose to 68.4, from 65.8 in March. Economists surveyed by Briefing.com expected the index to retreat to 65.0. Any reading above 50 indicates expansion in the sector.
Treasury prices tumbled, giving up a morning advance and extending their decline Tuesday following the Fed's statement. The 10-year note lost 4/32 of a point in price, pushing its yield up to 4.58 percent from 4.56 percent late Tuesday. The dollar remained weaker versus the yen and euro.
Among commodities markets, NYMEX light sweet crude oil futures added 59 cents a barrel to settle at $39.57, not far from 13-year highs. COMEX gold gained $2 to settle at $393.80 an ounce.
|
