September 16th, 2013 – September 20th, 2013
Welcome to Financial Buzz Weekly Stock Market Wrap, here at the New York Stock Exchange, bringing you a review of this week’s stock market.
We started off the week with the news that Larry Summers removed himself from consideration as the next head of the Federal Reserve. Mr. Summers is known for taking a hawkish stance, so the market reacted with a solid rally, seeing how the remaining front runners for the position seem to be in favor of easy money policies.
The Consumer Price Index showed tame inflation numbers, with a month-to- month increase of only .1% as energy costs declined. Microsoft Corporation (NASDAQ: MSFT) increased its dividend by 22% to $.28/share and set a new $40 billion stock buyback. Currently, 83% of stocks in the S&P 500 are paying dividends, the highest level in the past 15 years.
The big news this week was the Federal Reserve meeting on Tuesday and Wednesday. Much to the surprise and shock of Wall Street, the Fed decided to keep their bond buying program entirely intact at $85 billion a month. In a press conference, Fed Chairman Bernanke said that even though the labor market has improved, it’s still not satisfactory.
The unemployment numbers have fallen, however, large numbers of people have given up on the job market entirely and they are not reflected in official unemployment statistics. In addition with a possible government shutdown looming due to debt limit issues, Bernanke would like to see fiscal policy straightened out before it causes more damage to the economy. After the announcement, a strong rally ensued with the S&P and Dow reaching record highs. In addition, bond yields went down, and gold went up.
Existing home sales gained 1.7% month to month to an annual rate of 5.48 million units in August, reaching a 6.5 year high. However, the National Association of Realtors, which released the home sales report said the party may be over as buyers are simply rushing to beat the rise in mortgage rates. New unemployment claims came in at 309,000, significantly below expectations, however, due to last week’s computer glitches at two states, these numbers are still not reliable.
Now let’s take a look at some individual stocks. Atossa Genetics, Inc (NASDAQ: ATOS). announced it has entered into a nationwide distribution agreement with McKesson Medical-Surgical to sell and distribute Atossa’s MASCT device. The MASCT device is used in OB/GYN, primary care, and women’s clinics to perform a non-invasive collection of breast fluid.
Oracle Corporation (NYSE: ORCL) reported fiscal Q1 2014 revenues were up 2% to $8.4 billion, while new software licenses and cloud software subscription revenue was up 5% to $1.7 billion. In addition, Airbus selected Oracle’s Global Desktop product for implementation, which allows managing a variety of IT resources centrally.
Rite Aid Corporation’s (NYSE: RAD) 2nd quarter revenue increased to $6.3 billion from $6.2 billion a year ago, despite store closures. Net income came in at $32.8 million, compared to last year’s loss of $38.8 million. Booming generic drug sales was cited as a factor.