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U.S. Stocks Rise as Microsoft Rallies Amid Fed Meeting
<cite class="byline" style="margin: 0px; padding: 0px; border: 0px; outline: 0px; font-size: 11px; vertical-align: baseline; background-color: transparent; width: 640px; color: rgb(111, 111, 111); display: block; font-style: normal; line-height: 1.3em; position: static !important; background-position: initial initial; background-repeat: initial initial;">By Inyoung Hwang & Nick Taborek - Sep 17, 2013 9:51 PM GMT+0800</cite>
U.S. stocks rose, sending the Standard & Poor’s 500 Index toward a record high, as Microsoft Corp. jumped and Federal Reserve policy makers prepared to begin a two-day policy meeting.
Microsoft Corp. jumped 1.1 percent as the world’s largest software maker announced a $40 billion buyback and raised its quarterly dividend 22 percent. Mosaic Co. sank 1.4 percent afterNorth America’s second-largest fertilizer producer cut its quarterly forecast for potash and phosphate sales and prices.
The S&P 500 added 0.2 percent to 1,701.51 at 9:49 a.m. in New York. The benchmark index climbed yesterday to within five points of its record high of 1,709.67 reached on Aug. 2. TheDow Jones Industrial Average (INDU) increased 36.62 points, or 0.2 percent, to 15,531.40 today. Trading in S&P 500 stocks was 22 percent above the 30-day average at this time of day.
“Nobody’s going to make a major commitment until we get some color out of the Fed,” Eric Green, director of research and fund manager at Penn Capital Management, said by phone. The Philadelphia-based firm oversees about $7 billion. “Aside from company-specific news, the overall market is probably just sitting, waiting to get some direction. This meeting will set the tone for the next few months, most likely.”
The Federal Open Market Committee will probably lower its $85 billion of monthly bond purchases by $10 billion, according to the median response of 34 economists in a Bloomberg News survey this month. That’s down from the forecast of a $20 billion reduction in a July survey. The stimulus has helped the S&P 500 rally more than 150 percent from its March 2009 low.
Syria Weapons
The S&P 500 climbed 0.6 percent to a six-week high yesterday after tensions over dealing withSyria’s chemical weapons eased and Lawrence Summers withdrew his bid to be Fed chairman. That removed Janet Yellen’s main competitor from the contest to take over from Ben S. Bernanke in the central bank’s top job.
A Labor Department report today showed the cost of living in the U.S. rose less than forecast in August, a sign it will take time for inflation to reach the Fed’s goal.
The consumer-price index increased 0.1 percent, the least in three months, after a 0.2 percent gain in July, Labor Department figures showed today in Washington. The median forecast in a Bloomberg survey of economists called for a 0.2 percent gain in August.
In Germany, Europe’s largest economy, investor confidence increased for a second month in September. Foreign-direct investment in China rose 0.6 percent last month, trailing the median estimate of 12.5 percent growth in a Bloomberg survey.
Microsoft Buyback
Microsoft jumped 1.1 percent to $33.16. The new repurchase program, which has no expiration date, replaces another $40 billion buyback plan that was due to lapse at the end of this month, Redmond, Washington-based Microsoft said in a statement. The company’s dividend will rise 22 percent to 28 cents a share.
After struggling to keep up with rivals in the smartphone and tablet markets, Microsoft is retooling its strategy and seeking a new chief executive officer. Steve Ballmer, who has run the company since 2000, announced plans last month to retire when a replacement is found. The company also agreed to buy Nokia Oyj’s phone business for $7.2 billion, aiming to bolster its position in mobile devices.
Airlines Gain
US Airways Group Inc. climbed 3.2 percent to $18.65 and Delta Air Lines Inc. advanced 1.6 percent to $23.53. The two airlines were each raised to overweight from neutral at JPMorgan Chase & Co.
Broadcom Corp. gained 2.2 percent to $27.50. The chip maker was raised to positive from neutral by Susquehanna Financial Group analyst Christopher Caso.
Mosaic tumbled 1.4 percent to $44.90. Potash sales volumes in the third quarter will be 1.45 million to 1.65 million metric tons, down from a previous forecast on July 16 of 1.8 million to 2.1 million tons, Plymouth, Minnesota-based Mosaic said in a statement. Prices will be in the range of $330 to $340 per ton, compared with the $330 to $360 a ton originally forecast, according to the statement.
Global fertilizer markets have softened, in part, because of fertilizer distributors’ cautiousness related to the break up of Belarusian Potash Co., Mosaic said.
Outerwall Inc., owner of the Redbox DVD kiosks, dropped 14 percent to $48.17 after cutting its third-quarter and full-year forecasts because of discounts and shorter rentals.
To contact the reporters on this story: Inyoung Hwang in London at [email protected]; Nick Taborek in New York at [email protected]
To contact the editors responsible for this story: Andrew Rummer at [email protected]; Lynn Thomasson at [email protected]
