WESTON, Fla., June 16, 2004 (PRIMEZONE) -- Stocks have been climbing their way off the lows of the last two months, consolidating the gains they have forged over the last 18 month period. Concerns over the price of crude and trouble in Iraq continued to weigh on investors, but stocks were strong out of the gate, and were holding gains in early morning dealings. The Nasdaq Composite was up 25.28 points, to 1,994.43, while the Dow Jones industrial average was higher by 45.42 points, to 10,388.87.
Crude oil futures eased back below $42 per barrel in the past couple of weeks, after scaring analysts into thinking they might pop above $45. The price of crude oil rose after the U.S.-appointed head of the Iraqi Governing Council, Ezzedine Salim, was killed near the U.S. headquarters in Baghdad, and with continued troubles in the U.S.'s efforts in Iraq. Also damaging investor confidence were Commerce Department figures showing the U.S. trade deficit recently widened by 9.1 percent to a record $46 billion, much higher than what analysts were expecting.
Stocks in the news include Oracle Corp. (Nasdaq:ORCL) which beat estimates but was trading down overseas. European peer SAP (NYSE:SAP) was indicated higher on the news.
Best Buy (NYSE:BBY) reported first-quarter earnings from continuing operations of $114 million, or 34 cents per share, up significantly from its year-ago profit of $69 million, or 21 cents per share. Revenue rose in the latest three months to $5.48 billion from $4.67 billion last year.
Alcatel (NYSE:ALA) was up 3.3 percent overseas, as CEO Serge Tchuruk said at a conference that a satellite joint venture with Italy's Finmeccanica is "more or less" completed.
The latest Federal Open Market Committee meeting was held on Tuesday, May 4, 2004, where the FOMC changed its tune somewhat, saying in its statement that "The Committee perceives the upside and downside risks to the attainment of sustainable growth for the next few quarters are roughly equal," the FOMC said in its statement. "Similarly, the risks to the goal of price stability have moved into balance. At this juncture, with inflation low and resource use slack, the Committee believes that policy accommodation can be removed at a pace that is likely to be measured."
In plain terms The Fed is saying that conditions have improved to the point that rates can start moving up from their current historically low levels, but will probably do so at a measured, and even pace . . . no 50 and 75 basis point hikes in the near future. The Fed also said it "continues to believe that an accommodative stance of monetary policy, coupled with robust underlying growth in productivity, is providing important ongoing support to economic activity." Regardless, many analysts are saying the first rate increase may come as early as June.
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