Stocks jumped out of the gate this week as two strong economic reports and hopes the market would get what it wanted from the Fed in its interest rate decision on Wednesday had the Dow Jones Industrial Average (^DJI +0.04%) more than 1% most of the session. However, it faded late to finish up 110 points, or 0.7%.
This month's Empire State Manufacturing report came in well ahead of expectations, hitting 7.8 on expectations of just 0.8, improving from -1.4 in May. Markets also received a push from the National Association of Home Builders Market Survey, which topped 50 for the first time since April 2006, indicating that a majority of homebuilders view the housing market favorably. That hasn't happened in more than seven years. The index reached 52, way better than expectations at 45, and better than 44 last month.
Still, the market seemed mostly propelled by hopes that the Fed would keep its current bond-buying program in place as its Open Market Committee begins a two-day meeting tomorrow. The Fed will reveal the results Wednesday at 2 p.m., when it announces the benchmark interest rate, which is expected to hold at 0.25%, and provides its current view of the economy.
Cisco Systems (CSCO +1.05%) led Dow stocks today, finishing up 2.5% to hit a new 52-week high. The networking specialist first announced that it has opened an innovation center in Israel along with local telecom Pelephone to develop new technologies to meet growing demand for mobile data services, and unveiled a project called "Connected Boulevard" in Nice, France. The project is a prototype, which hopes to aid cities in areas such as parking traffic, street lighting, and waste disposal. Cisco also benefited from an overall strong day for tech stocks as Advanced Micro Devices jumped 2.8% and Micron Technology finished up 3.8%.
Not all Dow stocks were winners today, though, as Verizon (VZ +0.24%) shares finished down 0.7% after expressing interest in an acquisition north of the border. According to The Globe and Mail, Verizon is looking into purchasing Wind Mobile, a smaller telecom in Canada. Wind has already received offers from other interested, but unidentified, parties. The deal would give Verizon an inroad into the Canadian market of 30 million, but perhaps investors would rather see it buy out Vodafone's 50% stake in its wireless division.
Finally, Netflix (NFLX -2.49%) shares finished up 7.1% after reporting an agreement with DreamWorks Animation (DWA +0.00%). According to the deal, Netflix will offer original programming from the animation house starting in 2014, which it said was the biggest deal it's made for first-run content. The move is the video streamer's latest coup after releasing House of Cards to critical acclaim and more recently resurrecting Arrested Development and seeing its stock price triple this year. Financial terms of the deal were not disclosed.
