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Dow ekes out fresh record as Fed holds rates steady
AFP
NEW YORK
Petroleumworld.com 10 26 06
The Dow Jones share index eked out a fresh record high Wednesday after the Federal Reserve opted to keep US interest rates on hold.
The Dow Jones Industrial Average index closed up 6.80 points (0.06 percent) at 12,134.68, continuing its record-breaking streak after first smashing the 12,000-point barrier last week.
The Dow has soared to record heights in the past week as investors have cheered third-quarter earnings reports from US corporations.
The tech-packed Nasdaq composite meanwhile finished up 11.75 points (0.50 percent) at 2,356.59, while the broad-market Standard and Poor's 500 index ended 4.84 points (0.35 percent) higher at 1,382.22.
The Fed's decision to keep its main rate at 5.25 percent was widely expected, and although oil prices spiked, robust corporate earnings continued to underpin stock market gains.
Both General Motors Corp. and Boeing Co. reported better-than-expected earnings, but the reports failed to stop a slide in the companies' shares.
GM said it was on the road to recovery after posting a much smaller net loss of 115 million dollars in the third quarter.
In the same quarter of 2005, the world's biggest carmaker had recorded a huge net loss of 1.7 billion dollars.
Its earnings in the quarter ended last month came to 20 cents per share on record third-quarter revenue of 48.8 billion dollars.
But excluding special items, such as charges for a reorganisation under way at GM's bankrupt former parts division Delphi, the auto group would have made a profit of 529 million in the past quarter.
That would have come to 93 cents per share, compared with Wall Street's forecast of 49 cents before exceptionals.
GM's shares closed down 1.48 dollars at 34.71 dollars.
Boeing said its quarterly profits nose dived 31 percent as it pulled the plug on its in-flight Internet service.
The jet maker said its third-quarter net profits declined to 694 million dollars, compared with 1.0 billion dollars in the same period of 2005.
Although earnings per share moderated to 89 cents, compared with 1.26 dollars a
year ago, they still came in ahead of forecasts that had called for 63 cents.
However, Boeing's shares lost ground over concerns about mounting research and development costs, particularly for the company's long-range 787 "Dreamliner".
Boeing's stock ended down 2.73 dollars, or 3.3 percent, at 80.86 dollars.
On the economic front, US existing home sales fell last month for the sixth month running, owing to caution among buyers with prices still in decline, according to The National Association of Realtors.
September sales slowed by 1.9 percent to a seasonally adjusted 6.18 million units. Most economists had anticipated sales to drop by less, to 6.25 million units.
Sales fell from the 6.30 million unit pace recorded in August and were also down 14.2 percent from September 2005.
Oil and bond prices moved higher.
New York's main crude futures contract, light sweet crude for delivery in December, jumped 2.05 dollars to close at 61.40 dollars a barrel on a surprise slump in US energy inventories.
The yield on the 10-year US Treasury bond fell to 4.773 percent from 4.824 percent Tuesday while that on the 30-year bond declined to 4.897 percent against 4.942 percent. Bond yields and prices move in opposite directions.
AFP 25 2128 GMT 10 06
Copyright ©2006 AFP. All Rights Reserved.
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