The song and dance of international stock markets is a stressful enough tune that one might need a massage therapist on permanent in-call even if they are acclimated to its serenade. As investors awaited the news from the U.S. Federal Reserve this week, what they were treated with was the best news ever: Fed Chairman Ben Bernanke was called before congress to testify regarding the U.S. Senate Banking Committee, and there he assured the government that the Fed would only begin to slowly phase out stimulus efforts once economical stability had been reached and once the country’s economy was fully reestablished.
News reports of such good tidings immediately impacted the financial markets worldwide. Reassured investors began to slowly grab up equities, catapulting bourses to new highs and setting new benchmarks in the wake of the Fed inclination. The S&P 500 is headed for a 10th consecutive positive session in 11 sessions. Meanwhile, the Euro fell and the dollar rose as investors reacted.
The Dow Jones industrial average .DJI was up 62.89 points, or 0.41 percent, at 15,533.41. The Standard & Poor’s 500 Index .SPX was up 6.34 points, or 0.38 percent, at 1,687.25. The Nasdaq Composite Index .IXIC was down 2.59 points, or 0.07 percent, at 3,607.41.
“Bernanke has made equities the only place for most people to go, and the rally has been entirely on him,” said Mark Grant, managing director at Southwest Securities.
The strong earnings that were seen in the U.S. sector were intimated by gains with IBM as well as Morgan Stanley. However, Intel shares continued to slide as the company once again reported a substantial drop in profits, attributed mostly to the notion that more consumers are buying tablets and smartphones, as opposed to personal computers.
IBM Wins Big
IBM was the biggest winner of the day, all told. Its earnings per share gained an incredible 3 percent in value, even though revenue had declined during the second quarter. Overall, IBM stock enjoyed a 3 percent increase in value, closing out the day at $199.93 per share. IBM increased net income by 3 percent while losing about 3 percent in net revenue for the quarter. The entity reported a second quarter income of $4.19 billion on $25.37 billion in revenue.