Dow Falls On Fed's Frets

After trading flat most of the day, the Dow Jones Industrial Average (DJINDICES: ^DJI  ) dipped in the late afternoon, finishing down 44 points, or 0.3%. Releasing its interest rate decision at 2:15 PM, the Federal Reserve said that economic growth was fading, though temporarily, and that it would continue buying $85 billion worth of government bonds a month to keep interest rates low and stimulate the economy. The Fed also held its promise to continue the stimulus until unemployment reaches 6.5%, or inflation increases substantially.

Earlier in the day, news that GDP contracted by 0.1% in the fourth quarter also left the market with a sour taste in its mouth. While the figure marks the first time growth has gone negative since 2009, the dip was partially caused by a drop in government spending and a decrease in business inventories, and is not indicative of a recession. Economists had expected GDP to grow 1% in the quarter.

There was some good news out of ADP's unemployment report, however. The payroll processor said in its monthly employment report that 192,000 jobs were added in January, ahead of expectations of 175,000. The official employment report from the Labor Dept. comes out Friday, with 180,000 as the projected number of new jobs.

Turning to individual stocks, Boeing (NYSE: BA  ) led Dow components, with a gain of 1.3%, after topping estimates. The aerospace giant posted a profit of $1.28, against expectations of $1.19, but slightly down from a year ago. Its 2013 forecast notably assumed no significant impact form the battery problems with its 787 Dreamliner jets, and the company said it expects earnings of $5 to $5.20 this year. Addressing the battery concerns, management said fixing the problem is its number one priority. It has continued to build the planes, even as deliveries and flights have been suspended.

Reporting earnings after hours, Facebook (NASDAQ: FB  ) said its mobile ad revenue doubled, and overall revenue grew by 40%. Adjusted earnings a share came in at $0.17, ahead of estimates of $0.15, and up from $0.14 a year ago. Still, the social network seemed to be a victim of high expectations. Shares have gained 70% in less than three months and were up 1.5% during the session, before falling 3.4% after the report came out.

Finally, Research in Motion (NASDAQ: BBRY  ) got rocked after releasing its long-awaited Blackberry 10 operating system, which will be available on two new models. Shares tumbled 12%, as the phone doesn't appear to be the savior that some investors had hoped it would be. The market seemed to be bothered by the lack of apps on the phones, and the fact that they won't be available in the U.S. until March and April. The company also said it would change its name to Blackberry.

With great opportunity comes great responsibility. For Boeing, which operates as a major player in a multi-trillion dollar market, the opportunity is absolutely massive. However, the company's execution problems and emerging competitors have investors wondering whether Boeing will live up to its shareholder responsibilities. In this premium research report, two of the Fool's best industrial industry minds have collaborated to provide investors with the key, must-know issues around Boeing. They'll be updating the report as key news hits, so make sure to claim a copy today by clicking here now.


Read/Post Comments (2) | Recommend This Article (2)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On January 31, 2013, at 12:30 AM, KevinniveK wrote:

    You'll want to consider spelling BlackBerry correctly given that it is the new brand name

  • Report this Comment On January 31, 2013, at 1:49 AM, Ste2034 wrote:

    Let them doubt and sell before the phone is even out will drop points for us to pick up before the release and rise from not only a new phone finally but a new company name

Add your comment.

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 2226178, ~/Articles/ArticleHandler.aspx, 8/29/2014 10:02:47 AM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...


Advertisement