Stocks rally on Fed comments on economy
(AP)Updated: 2007-03-22 09:22
The relief over the statement Wednesday could be short-lived if new data arrives in the coming weeks showing inflation ramping up. Market watchers will remember that Fed's decision to leave rates unchanged last month led to an initial elation that helped bring the Dow to its 31st record high since October - but that elation wore off a week later when worries emerged related to plummeting markets overseas, the faltering subprime mortgage market, dollar weakness versus the yen, and the possibility of a recession.
While most of Wall Street's attention Wednesday was squarely on the Fed, a few key earnings reports also drew interest. Morgan Stanley's fiscal first-quarter earnings and revenue blew past Wall Street's estimates and FedEx Corp.'s fiscal third-quarter earnings came in stronger than expected but the shipping company warned profits in the coming fiscal year could fall below its expectations.
Morgan Stanley rose $4.66, or 6.1 percent, to $80.77, while FedEx fell $1.30 to $110.99.
Software companies showed gains. An acquisitive Oracle Corp. indicated its expansion plans might be reaping dividends as its fiscal third-quarter earnings and new software sales topped Wall Street's expectations. Oracle advanced 62 cents, or 3.5 percent, to $18.17.
Adobe Systems Inc. rose $2.56, or 6.3 percent, to $43.30 after the company reported its first-quarter results topped Wall Street's expectations and the company increased its profit forecast.
Advancing issues outnumbered decliners by about 5 to 1 on the New York Stock Exchange after being nearly even before the Fed's announcement. Consolidated volume came to 3.13 billion shares, up from 2.75 billion on Tuesday.
The Russell 2000 index of smaller companies rose 13.87, or 1.75 percent, to 807.47.
Overseas, markets in Japan were closed for a holiday. Britain's FTSE 100 closed up 0.59 percent, Germany's DAX index added 0.18 percent, and France's CAC-40 slipped 0.02 percent.
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