Summary: Stocks rebounded aided by minutes from the last Federal Reserve meeting; American Airlines halt sector slide; Alcoa gains after earnings; Citi near $7b settlement; Container Store slumps. Conway G. Gittens reports.
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Wall Street bounces back from the beating it took the day before with the Federal Reserve lending a helping hand.
Blue chips regained 78 points, the S&P 500 rose 9, the Nasdaq rallied 27.
The Federal Reserve provided a road map on how it will end this unprecedented era of stimulus. Minutes from the Fed's June meeting show policymakers basically agreed to end monthly bond purchases in October.
The end of bond buying, aka quantitative easing, aka QE, provides a clue on when to expect the first rate increase, says Chris Rupkey, chief financial economist at Bank of Tokyo-Mitsubishi.
SOUNDBITE: CHRIS RUPKEY, CHIEF FINANCIAL ECONOMIST, BANK OF TOKYO-MITSUBISHI (ENGLISH) SAYING:
"Remember a while back, the Fed chair got trapped, perhaps, into saying considerable period from the end of QE to the first rate hike was six months, well if they end in October, then the first rate hike could be in March. Knock on wood. I hope it's true."
But most say the Fed is still on track for its first rate hike sometime in the middle of next year. American Airlines also helped lighten the mood on Wall Street. The air carrier tweaked a key sales estimate for the quarter, which includes the start of summer travel. A relief after warnings from others like Delta, Lufthansa and AirFrance-KLM. The forecast helped American rebound, along with JetBlue, Delta, Southwest and United.
Analysts boost their price target on shares of Alcoa - one day after the aluminum giant surprisingly exceeded both earnings and sales forecasts. Shares of Alcoa touching highs not seen in almost four years.
The opposite sentiment for the Container Store. The retailer blamed weak consumer spending for lowering its full year forecast. Analysts, however, blame the store for lack of discounts. Shares plunged to the lowest since going public last year.
Citigroup is close to reaching a $7 billion deal to settle government charges of mortgage securities fraud leading up to the financial crisis. No comment from Citi or the Department of Justice. Shares were off by a little by the end of the session.
Turning to Europe, Nike and UK soccer champ Manchester United are parting ways after a more than decade long partnership. Nike cites the high cost. Markets across Europe finished narrowly mixed.
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