Stocks finished higher Wednesday, showing little reaction to the Federal Reserve's announcment that it had increased the Fed funds target rate by 25 basis points, as expected. Strong earnings reports from Internet search provider Google (GOOG) and other big names resulted in modest gains earlier in the day. Oil prices moved higher.
The Dow Jones industrial average gained 44.85 points, or 0.43%, to move to 10,596.79. The broader Standard & Poor's 500 index rose 3.78 points, or 0.32%, to 1,193.19. The Nasdaq composite index rose 6.36 points, or 0.31%, at 2,075.06.
At the close of its two-day policy meeting, the Fed announced an increase of another 25 basis point in the Fed funds target rate to 2.50%. The post-meeting statement was nearly identical in wording to the last announcement by the Fed. The "measured" language was retained, says Action Economics, meaning that a similar hike can be expected at the next meeting on March 22.
The most closely watched economic report of the week will be employment figures for January, which are due out on Friday. Nonfarm payrolls are expected to have risen by 200,000 in January, up from 157,000 in December, according to Action Economics. The unemployment rate is expected to hold at December's rate of 5.4%.
Oil prices settled down 48 cents, trading at $46.64 on the New York Mercantile Exchange. The inventory report Wednesday morning reported an inventory increase of 778,000 barrels.
After the close Tuesday, Google released its fourth-quarter earnings. The company reported net income of 71 cents a share vs. 10 cents a year ago. Average analyst estimates were 77 cents per share, but do not take into account one-time costs.
Aerospace giant Boeing (BA) beat forecasts, posting earnings of 23 cents vs $1.40 last year, with a 1.2% rise in revenue. The company attributed the decline in profits to charges related to two troubled aircraft programs.
Video-game publisher and developer THQ (THQI) announced it saw profits double in the third quarter, with earnings of $1.58 per share vs. 78 cents last year. The earnings exceeded estimates, and Piper Jaffray upgraded the stock.
Job-listing website Monster (MNST) saw a 45% revenue rise, posting profits of 20 cents vs. 11 cents last year in the fourth quarter. The earnings fell slightly below Wall Street expectations.
NVIDIA (NVDA), a developer of digital media processors, raised its fourth-quarter revenue guidance, citing higher margins.
Software company Adobe Systems (ADBE) raised its first-quarter guidance, due to strength in sales of its Acrobat 7.0 product family.
Treasuries were mostly flat following the unchanged Fed announcement, and now await Friday's employment numbers and President Bush's State of the Union address Wednesday night. The 10-year note's yield traded at 4.14%.
The dollar was slightly stronger, but range-bound ahead of the Fed announcement and the State of the Union. The euro was at $1.303.
European stock markets finished higher Wednesday. In London, the Financial Times-Stock Exchange 100 index rose 10.70 points, or 0.22%, to 4,916.90.
Germany's DAX index went up 16.34 points, or 0.38%, to 4,296.31.
In Paris, the CAC 40 index gained 12.54 points, or 0.32%, moving to 3,951.72.
Asian markets finished mixed Wednesday. Japan's Nikkei average rose 22.74 points, or 0.20%, to close at 11,407.14.
Hong Kong's Hang Seng index dropped 22.46, or 0.17%, to close at 13,555.80.