Unit 5 Section 3 Unveiling Results

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Wall Street Journal

January 2012

US Stocks Close Higher After Fed Statement

By Jonathan Cheng

U.S. blue chip stocksraced to an eight-month high and the Standard & Poor's 500-stock indexstepped into a new bull market Wednesday after the Federal Reserve said it would likely keep interest rates low until at least late 2014.

The Dow Jones Industrial Average rose 83.10 points, or 0.66%, to 12758.85, its highest level since May 10, 2011. The blue-chip index had fallen as many as 96 points shortly after the opening bell, but shot higher after the Fed's announcement at 12:30 p.m. EST¹.

The S&P 500 finished with a gain of 11.41 points, or 0.87%, at 1326.06, closing the day in bull-market territory - up more than 20% from its recent closing low on Oct. 3, 2011. The Nasdaq Composite² led the major indexes with a gain of 31.67 points, or 1.14%, at 2818.31.

The moves came after the central bank said it expects interest rates to stay at "exceptionally low levels" at least until late 2014. Previously, the Fed had said it expected the period of exceptionally low rates to last until mid-2013. The Fed said the economy continued to expand at a moderate pace and noted the recent improvement in overall labor-market conditions, though unemployment remains "elevated."

The Fed's move sent the dollar tumbling against its major rivals, pushing up³ commodity prices and sending³Treasury yields sharply lower.

Leading the day's gains was Apple, which saw its shares surge 6.2% after the technology giant reported first-quarter earnings and revenue that blew past estimates, helped⁴ by sales of iPhones and iPads that more than doubled from a year earlier.

Apple's gains helped the technology sector stand out as one of the strongest sectors on the S&P 500. Utilities also surgedamid a drop in Treasury rates. Financial stocks were the weakest.

European markets finished with modest losses. The Stoxx Europe 600⁵ declined 0.4%, as⁶ concerns over the lack of a debt-restructuring agreement between Greece and its private creditors and mixed economic data weighed onsentiment.

Asian exchanges were mostly higher. Japan's Nikkei Stock Average⁷ rose 1.1% to finish near a three-month high.

Gold futures reversed losses after the Fed announcement, rising well above $1,700 an ounce before settling up⁸ 2.1% at $1,699.80 an ounce. Crude-oil futures turned losses into a strong

gain, surging⁹ above $100 a barrel before finishing up¹⁰ 0.5% at $99.40 a barrel. The dollar, which was rising against the euro and the yen, reversed course to lose ground to both currencies after the Fed announcement.

Demand for 10-year Treasury notes surged after the central bank move, sending the yield, which moves inversely to price, down to 1.2009%.

In other corporate news, Boeing edged up 0.6%, after the aerospace company reported fourth-quarter results that exceeded expectations, but indicated that a large pension expense would hurt 2012 earnings.

Advanced Micro Devices climbed 3.1% after the semiconductor maker's fourth-quarter earnings beat estimates but revenue missed slightly. Fellow chip maker Altera edged up 1.1% after the company reported better-than-expected fourth-quarter results but indicated current-quarter sales would miss estimates.

Delta Air Lines surged 6.2% after posting¹¹ sharply higher earnings. US Airways Group jumped 17% after posting¹² stronger revenues and topping¹² earnings estimates.

Xerox tumbled 9.9% after the printer-and-copier maker reported fourth-quarter earnings that matched estimates, while revenue was a bit shy.

Yahoo slipped 0.8% after the Internet company reported fourth-quarter earnings that were in line with expectations, while revenue came in a bit modest.

Notes:

1) EST=восточное летнее время

2) the Nasdaq Composite= the Nasdaq is the exchange on which technology stocks are traded. The Nasdaq Composite Index is a market-value-weighted index of all stocks traded on the Nasdaq stock exchange. This index includes more than 5,000 companies, including some that are not based in the U.S. Although this index is known for its large portion of technology stocks, the Nasdaq Composite also includes stocks from financial, industrial, insurance and transportation industries, among others. The Nasdaq Composite includes large and small firms but, unlike the Dow and the S&P 500, it also includes many speculative companies with small market capitalizations. Consequently, its movement generally indicates the performance of the technology industry as well as investors' attitudes toward more speculative stocks.

3), 4), 9) См. Учебник “Экономический английский”, стр. 13 “Причастие”

5) The Stoxx Europe 600=the Dow Jones Stoxx Europe 600=a stock index that measures the financial performance of leading European companies.

6) См. Учебник “Экономический английский”, стр. 422 “Служебные слова (“as”)”

7) Japans Nikkei Stock Average=short for Japan's Nikkei 225 Stock Average, the leading and most-respected index of Japanese stocks. It is a price-weighted index comprised of Japan's top 225 blue-chip companies on the Tokyo Stock Exchange. The Nikkei is equivalent to the Dow Jones Industrial Average Index in the U.S. In fact, it was called the Nikkei Dow Jones Stock Average from 1975 to 1985.

8), 10), 11), 12) См. Учебник “Экономический английский”, стр. 410 “Герундий”