Wall Street Boosted by FOMC Minutes
The minutes from the meeting revealed that a number of the Federal Open Market Committee members felt that unless the economic recovery shows what it referred to as a ‘substantial and sustainable strengthening’ additional action by the central bank would be warranted. With recent economic data, including data for consumer spending and jobs, indicating a moderate recovery, some analysts believe there will be no need for additional stimulus. As reported by the National Association of Realtors on Wednesday, housing prices and house sale numbers rose in July over June, with the 2.3% increase in sales being the first gain notched up in three months. Nevertheless, at 4.47 million p.a. the rate of home sales remains below the 5.5 million considered by economists to be an indicator of a healthy real estate market.
Stocks making notable moves on Wednesday included Dell which slumped by more than 5% to $11.68 quoting weak second quarter PC sales as a reason; Wiliams-Sonoma reported a 10% increase in profit sending its stock up 12% to $42.68; Discover Financial Services announced a partnership with PayPal boosting its stock to $38.43, being a 4% gain; Toll Brothers Inc reported an increase in new orders and a higher quarterly profit, sending stock to its highest level since Feb 2007 at $33.10.
It was also noted in the FOMC minutes that many officials were in favor of delaying any increase in short-term interest rates past the Fed’s stated target of late-2014. This is in keeping with the opinion of many economists who think the target will be adjusted to mid-2015.