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Wall Street hits record as Bernanke pulls back

Wednesday, Dec 18, 2013 - 02:12

Dec. 18 - Summary: The Dow and S&P 500 soar to new records as the Fed slows stimulus but vows to keep rates low; Housing starts jump; Dish eyes T-Mobile -source; Oracle sales dip smaller than feared. Conway G. Gittens reports.

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What's the value of economic confidence? $10 billion, according to the Federal Reserve. The Federal Reserve showing confidence in the economic recovery - trimming bond purchases to $75 billion a month from $85 billion -starting January. But with strong assurance from outgoing Chairman Ben Bernanke: SOUNDBITE: FEDERAL RESERVE CHAIRMAN BEN BERNANKE (ENGLISH) SAYING: "The Committee also clarified its guidance on interest rates emphasizing that the current near zero range for the federal funds rate target likely will remain appropriate well past the time that the unemployment rate declines below 6-1/2 percent especially if projected inflation continues to run below the Committee's two percent longer run goal." And with that investors gobbled up stocks, causing the Dow and the S&P 500 to finish the day strong at record highs. Looking for signs of a better economy? Look no further than the housing market. Housing starts surged to their highest level in just about six years. Higher interest rates have tempered the recovery, but not enough to stop it. Quarterly software sales and subscriptions at Oracle - down much less than expected. Providing another sign the global economic recovery may be getting stronger. One other positive development: the U.S. senate approved the two-year bi-partisan budget pact reached last week. Suitors appear to be lining up for T-Mobile. Dish Network is considering a bid, according to sources. Last week it was reported Sprint was thinking about putting an offer on the table. All three stocks were up ahead of the late breaking news. Not all corporate news was so market friendly. Ford issued a profit warning for next year. A record number of product launches and weakness in South America, along with Europe, will dent profitability. And FedEx continues to be hurt by customers shifting to lower-cost delivery methods. Profits missed forecasts but the growth of online shopping means FedEx is shipping more packages during this, the holiday-shopping quarter. Paying with plastic takes on a new meaning in the UK. The country unveiled new bills made with plastic polymer instead of cotton. The money goes into use starting in 2016. As for the markets, stocks were up as Europeans were willing to bet before the Fed decision.

Wall Street hits record as Bernanke pulls back

Wednesday, Dec 18, 2013 - 02:12

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