Dow: 13,593 (+0.40%) S&P 500: 1,466 (+0.40%)
Our friends in Asia and Europe had their first chance to react to QE3 when they woke up to read their local papers this morning. After confirming the legitimacy of the reports during their subway commute by reading MarketSnacks on their mobile phones, stock markets from Hong Kong to Frankfurt to London splashed into the quantitative easing after-party and set new monthly highs. With the rest of the world raging on in celebration of the Fed‘s new stimulating monetary policy, American markets this morning spiked on continued optimism. But a meat-n-potatoes serving of raw econ data came in mixed, slowing the rally. Apple‘s post-iPhone jump lifted its nerdy tech peers, while Kraft Foods reported that it’s losing its blue chip stock index status. The Dow added 54 points to cap the green-filled week, reaching a new multi-year high.
CPI, Consumer Confidence, Retail Sales and Industrial Production show mixed econ results
Remember that Seinfeld episode where George gets a new job, Elaine loses hers and Jerry basically breaks even? The hefty amount of US econ data was similarly all over the place. On the bright side, the bi-monthly Reuters/University of Michigan consumer-sentiment index for the first ½ of September showed folks felt better about the economy over the last couple weeks. US retail sales gained 0.9% in August, right in line with expectations. However US industrial production slipped 1.2% in August, more than analysts’ forecasts, and the Consumer Price Index rose 0.6% for its largest 1-month advance since ’09 (the big increases were driven by sky-high gasoline prices). The CPI measures inflation by taking the average of a bunch of goods & services across US cities to determine how much the dollar in your pocket is really worth by judging what it can buy. Investors weren’t that impressed…TGIF.
Apple hits record price and lifts Zynga, Facebook & Yelp
Apple (AAPL) made a limited number of iPhone 5 sales available at midnight last night and they were sold out 7 hours later. Not too shabby. The first owners will have to wait 2 agonizing weeks for the new product to arrive at their doorsteps. Although this iPhone has no mind-blowing new features that we’ve come to expect from fresh Apple products, the modestly sexier design and upgrades have been enough to lift the stock 5% since we first laid our eyes on the beautiful creation Wednesday. (Need we even mention that Apple hit a new high today, $693?). Zynga, Facebook, Yelp, and other companies reliant on mobile device access rode the back of the iPhone to gains.
Kraft Foods dropped from Dow Jones Industrial Average
Meanwhile Kraft Foods (KFT) has been kicked out of the 100+ year-old Dow Jones Industrial Average and replaced with UnitedHealth Group (UNH), a health insurance company. Clearly the “Industrial” part of the Dow’s name is antiquated, as there is nothing industrial about a health insurance company. The index tracks 30 of the largest blue chip stocks in the US. But since Kraft is “spinning off” its North American grocery business into a smaller, separately listed company with its own stock, the remaining Kraft Foods is not big or stable enough to keep the Dow’s blessing. The keepers of the Dow pride themselves on maintaining their status as the stable, most persevering stocks that won’t easily be knocked down.
- New York vs. Philly – The Empire State Manufacturing index is Monday then the Philadelphia Fed Survey Thursday measure business activity in the mid-atlantic.
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