Equity markets broadly charged higher on Wednesday following the latest FOMC announcement coupled with stellar earnings from Apple. On Wall Street, the Nasdaq took the lead, gaining an impressive 2.30% on the day, while the Dow Jones Industrial Average lagged behind, inching higher by 0.69% as the trading session drew to a close. As many had expected, gold went for a wild ride following commentary from Chairman Bernanke; futures prices dropped as low as $1,625 an ounce, only to spike right back up and settle just above the $1,640 level [see also Three ETFs For The End Of Operation Twist].
Investors payed little attention to the worse-than-expected durable goods data released in the morning; the monthly figure came in at negative 4.2%, falling short of the negative 2.9% estimate, as well as the previous reading of 1.9%. Stocks reacted positively to the latest commentary from the Fed, which signaled that the recovery is still slowly (but surely) moving along; the FOMC also affirmed its stance on keeping “exceptionally low rates” until late 2014. In international news, U.K. GDP came in slightly worse-than-expected; economic growth for the European powerhouse came in at negative 0.2% for the quarter, just barely falling short of the 0.1% estimate [see Euro Drama Is Back: Trade The Range In FXE].
The State Street Technology Select Sector SPDR (XLK) was one of the best performers, gaining 2.83% on the day, bolstered by blowout earnings results from electronics giant Apple. The tech sector lead the way higher thanks to shares of Apple, which rallied close to 9% on the day, following another (much) better-than-anticipated earnings release [see also High Tech ETFdb Portfolio].
The Barclays iPath S&P 500 VIX Short-Term Futures ETN (VXX) was one of the worst performers, shedding a dismal 6.09% on the day. Uncertainty largely evaporated from the market as Ben Bernanke assured investors that the Fed would remain open to more stimulus measures if deemed necessary. The Fed Chairman commented, “Our intention is to maintain highly accommodative stance of policy for the foreseeable future” [see also Five Questions To Ask When Buying An ETF].
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Disclosure: No positions at time of writing.
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