Last updated: September 18, 2013 11:21 pm

S&P 500 jumps to record after Fed announcement

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The S&P 500 and Dow Jones Industrial Average shot to record highs on Wednesday after the Federal Reserve announced that it would not yet begin to scale back its quantitative easing asset purchase programme.

After starting the day off slightly, the S&P gained 1.2 per cent to 1,725.52, easily eclipsing the previous intraday high of 1,709.

The Dow Jones Industrial Average also hit a fresh high, up 1 per cent to 15,676.94, while the Nasdaq Composite Index also rose 1 per cent to 3,783.64.

During the day’s rally Adobe Systems was one of the biggest gainers. Its shares jumped after it announced that it expected subscriber growth to top the 331,000 number that it added in the third quarter on strong demand from corporate customers, Reuters reports.

The company, known for its Photoshop and Acrobat software, rose 9.2 per cent to $52.58.

FedEx posted a bigger quarterly profit as the courier company cut costs and its lower-priced ground shipping business did well, sending its shares up 5 per cent to $116.25.

The fingerprint reader on Apple’s top-end iPhone 5s received early praise for ease of use from two influential reviewers, helping dispel concerns about the scanning technology that has been notoriously unreliable in other cellphones. Apple shares rose 2.1 per cent to $464.68.

Shares of Mexico’s low-cost airline Volaris rose on their US debut after the company raised about $350m through an initial public offering. Volaris jumped 15.8 per cent to $13.90.

Dollar Tree rose 3.6 per cent to $57.82 after the value retailer announced a $2bn share repurchase programme.

The company also said it had entered into agreements to repurchase $1bn of its common shares under a variable maturity accelerated share repurchase programme.

Caesars Entertainment dropped 9.8 per cent to $23.39 after the casino operator said it had begun a refinancing process for its outstanding mortgage loans under the second amended and restated loan agreement.

RBC Capital Markets analyst John Kempf said the share movement was a sell-off on the news as the stock was running up in anticipation of the announcement.

Triumph Group, maker of aircraft components, said it expected to record additional pre-tax costs of $68m, or 83 cents per share, associated with its 747-8 work.

The company expected a charge of about $44m, or 53 cents per share, to be included in the second-quarter results, while $11m, or 14 cents per share, would be reflected in third-quarter earnings. Its shares fell 8 per cent to $72.30.

Responsys jumped 9.5 per cent to $16.31 after Morgan Stanley raised its rating to “overweight” from “equal weight” on the marketing software and online services provider’s stock.

Speciality value retailer Five Below fell 5.2 per cent to $45.99 after the company announced a secondary offering by its shareholders.

It said shareholders had agreed to sell 7.1m shares of its common stock, of which 7m shares would be sold by funds affiliated with Advent International and 100,000 shares would be sold by Five Below’s executive chairman.

Brokerage Barclays Capital upgraded Cognizant Technology Solutions to “overweight” from “equal weight” as it sees growth in the IT services provider’s business in consulting and outsourcing in Europe.

It also expected strong growth in its healthcare business. Barclays raised its price target on the company’s stock to $97 from $80.

Brokerage Evercore Partners also raised its price target late on Tuesday. The shares rose 3.1 per cent to $83.59.

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