Stocks tread water waiting for FOMC meeting
Stocks in the US took a breather at the open, edging lower after experiencing solid gains over the past week. For the week the S&P 500 index is up approximately 2% while the Dow Industrials notched gains of 2.7% coming into Thursday trading session. The Nasdaq did its bests to hold on to gains despite a 5% drop in benchmark stock Apple Inc., which disappointed investors with little wow factor when introducing its new products on Tuesday. The Chinese market continued to grind higher providing tailwinds for the US markets.
In corporate news Verizon’s block buster bond offering of 49 billion worth of bonds created a frenzy throughout the corporate bond market as investors clamored for a piece of the giant offering. Verizon’s bond prices traded higher throughout the day, sending yields on their bonds lower which is a sign of strong demand. The wireless company’s new 10-year bond yielded 4.873% at the end of the trading session on Wednesday afternoon, down from a 5.192% yield for the same 10-year bond offered at the time of sale.
Prices of Facebook (NASDAQ:FB) received a boost on Thursday after analysts upgraded the stock price. Facebook shares are higher after JPMorgan (NYSE:JPM) reportedly raised its price target on the stock to $53 from $44 per share. It maintained its Buy rating.
In Asian trading, China’s Shanghai Comp closed up 0.64% and is now up 5.4% for the week, as positive sentiment continues owing to better than expected August economic numbers from the weekend. The next major catalyst is the September flash PMI on September 23, 2013.
Stocks ran out of steam toward the end of the trading session with all three major averages finishing in the red. The Nasdaq 100 closed down 0.13%, holding above support near 3150. Momentum remains strong with the MACD printing in positive territory.
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