Stocks end the week higher despite mixed economic news. The Fed raises the discount rate signaling an exit strategy to a loose money policy.
Hi. I’m Sayoko Murase. Welcome to the “Weekly Market Wrap” for Friday, February 19, 2009.
Major U.S. markets rose this week as worries about a tighter Fed policy eased.
The Dow Industrials ended the week higher. The S&P 500 Index was up and the Nasdaq Composite Index also advanced.
Gold prices jumped higher this week, trading around the $1,118 an ounce level late this afternoon.
Crude oil futures also rose higher this week. Near month crude futures were trading just under $80 a barrel on Friday afternoon.
On the economic front, industrial production and capacity utilization data were released on Wednesday. Industrial production came in at a 0.9 percent increase for January. The consensus number was 0.8 percent. Industrial capacity utilization met economist’s expectations of 72.6 percent.
A big surprise came with January’s Producer Price Index, released on Thursday with a monthly increase of 1.4 percent, far higher than expectations of 0.8 percent.
The Consumer Price Index for January also surprised, with core CPI going in the other direction at minus 0.1 percent. The overall CPI was higher by 0.2 percent, just under expectations of 0.3 percent.
The Federal Reserve Bank hiked the discount rate from 50 basis points to 75 basis points on Thursday afternoon, surprising observers. Analysts are wondering if the hike is symbolic of a serious exit strategy and if it will help encourage banks to increase lending to business.
It was a big week for earnings in the gold mining industry. IAMGOLD (NYSE:IAG) reported 11 cents per share in earnings, adjusted for special items. Consensus quarterly earnings estimates were for 16 cents.
Agnico-Eagle (NYSE:AEM) reported 32 cents a share, ex-items, in profits against expectations of 25 cents.
Kinross Gold (NYSE:KGC) swung to a profit in the fourth quarter with adjusted earnings of 21 cents per share, beating estimates of 16 cents.
Barrick Gold (NYSE:ABX) reported a fourth quarter profit of 61 cents per share, beating the street estimate of 59 cents. Barrick also said it will spin off African mining assets in a new gold company that will list on the London Stock Exchange.
In other earnings news, Whole Foods Market (WFMI) released earnings of 32 cents per share. Consensus earnings estimates were for 26 cents.
On Wednesday, Devon Energy (NYSE:DVN) reported $1.60 per share in profits, ex-items. Analysts were calling for earnings of $1.25 per share.
Retail giant Wal-Mart Stores (NYSE:WMT) released earnings of $1.21 per share, beating analyst expectations of $1.12 for the fourth quarter.
This is the “Weekly Market Wrap” for Friday, February 19. Please join us on Tuesday for the “Week Ahead Market Report.”
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