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Last updated: February 10, 2010 10:41 pm
US stocks edged into the red yesterday after Ben Bernanke, the Federal Reserve chairman, outlined the central bank’s plans to reverse its loose monetary policy.
However, trading volumes remained low due to heavy snow on the east coast of the US that paralysed transport systems.
Dave Rovelli, managing director of trading at Canaccord Adams, said Bernanke’s comments over the government’s exit from quantitative easing had weighed on stocks.
“Now we’re rallying back because there is no one here. It’s like a holiday,” he added.
The S&P 500 fell more than 1 per cent after Bernanke’s comments but only closed 0.2 per cent lower at 1,068.13. The Dow Jones Industrial Average lost 0.2 per cent to 10,038.38 and the Nasdaq Composite was 0.1 per cent lower at 2,147.87.
However, the market had already opened in the red as investors waited nervously for greater clarity on Europe’s response to the debt crisis in Greece.
Dean Foods led the S&P 500 lower after the dairy products company posted a lower profit than expected and gave a disappointing forecast for this year.
The group said it had suffered as high milk prices had encouraged shoppers to switch to discount brands. Its shares, which only edged 0.2 per cent higher last year, plunged 13.9 per cent to $15.19.
ArcelorMittal, the world’s biggest steelmaker, also weighed heavily on the market after giving a disappointing profit forecast for the first quarter. The group said it expected increased demand from carmakers in the economic recovery but warned that progress would be slow. Its shares lost 7.1 per cent to $36.66.
In the technology sector, Adobe Systems rose 1.4 per cent to $32.76 after Credit Suisse upgraded the world’s largest maker of graphic-design programs to “outperform” from “neutral”. Analysts cited confidence in the future of Adobe Flash and the planned upgrade of its Creative Suite product later this year.
Sprint Nextel posted a smaller quarterly loss than last year but the results were worse than Wall Street had forecast.
The third-largest mobile phone operator has been forced to offer deeper discounts to offset subscription declines, eroding the group’s revenues. Its shares were initially up in pre-market trading but later fell 8 per cent to $3.36.
IntercontinentalExchange fell 3.2 per cent to $95.68 after the company missed its quarterly consensus estimate. However, profit during the period still jumped 70 per cent due to a rebound in energy trading.
Netgear, which makes networking equipment for homes and small businesses, rose 10.1 per cent to $23.96. The group gave an encouraging forecast for the first quarter thanks to the popularity of new products.
Elsewhere in the sector, shares in Dell rose 1.5 per cent to $13.75 after Bank of America Merrill Lynch upgraded the computer manufacturer to “buy” from “neutral”. Analysts said the group had underperformed since November due to scepticism about the company’s gross margins.
The bank also upgraded Tiffany, the luxury jeweller, to “buy” from “neutral”, helping to boost its shares 2.7 per cent to $41.14. Analysts noted the retailer’s potential for international growth and that its January sales had been better than expected.
New York Times announced that its quarterly profit had more than tripled, beating analysts’ expectations. However, the group said advertising revenues had continued to decline, falling 15 per cent in the last quarter.
While demand has risen for digital advertising, the newspaper group has made plans to charge for content in 2011 in an effort to fully offset lower revenue from print advertising. After early strength, the shares were down 9 per cent to $10.62.
Walt Disney gained 0.6 per cent to $30.03. The world’s largest media company posted quarterly profit above analysts’ consensus estimate thanks to rising television revenue and improving trends at its theme park business.
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