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Market Update

Fed Minutes Show Support for Tapering Timeline


Author: Nichole Harper
ticker.com
Last Update: 2:33 PM ET August 21 2013

2:30 PM New York – U.S. indexes briefly rebounded after the release of Fed statement that showed a broad support for the stimulus tapering time-line. Market indexes however dipped back near the low of the day. U.S. Treasury yields traded sideways. European market indexes fell. Rupee led the emerging markets currency plunge.

U.S. stocks traded sideways as trading volume on several exchanges hovered near the low for the month and the year.

Market indexes opened higher after the earnings release from Target, Lowe’s and Staples and declined more than 0.6% by mid-day despite existing home sales jumped in July.

S&P 500 index decreased 9.07 to 1,643.39 and Nasdaq Composite Index fell 15.96 to 3,597.96.

Market indexes accelerated the decline after the release of FOMC meeting minutes showed a broad support for Fed Chairman Bernanke tapering timeline.

“Almost all participants confirmed that they were broadly comfortable with the characterization of the contingent outlook for asset purchase that was presented in the June meeting,” the statement released by the Fed showed.

However, several participants in the rate setting committee also supported a wait-and-see attitude and review future economic data before curtailing bond purchase program.

Federal Reserve currently purchases $40 billion of mortgage bonds that supports the housing market and additional $45 billion purchase of U.S. Treasury long term securities.

The yield on 10-year U.S. Treasury bond edged lower 3 basis points to 2.49% and on 30-year bond to 3.58%.

Home Sales Jump 6.5%

Existing home sales increased 6.5% in July from previous month to 5.39 million seasonally adjusted annual rate, the National Association of Realtors said today.

The sales rate surged 17% from a year ago month.

The home sale rate in July was the best since November 2009 when industry sold 5.444 million homes across the nation.

Median home price increased 4% to $213,500, the largest annual jump since 2005.

U.S. Stocks in Review

Lowe’s (LOW) added 5% after the second-largest home improvement chain reported better than expected second-quarter earnings and also lifted its annual earnings estimate.

PetSmart (PETM) fell 4% after pet supplies retailer estimated third-quarter earnings between 83 cents and 87 cents a share, below estimates of at least 86 cents from several analysts.

Staples Inc (SPLS) plummeted 15% after office supplies retailer reported weaker than expected second-quarter results.

Target Inc (TGT) declined 4% after the second largest discount retailer reported lackluster comparable same store sales and weaker than expected quarterly results.

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Sources: Data collected by 123jump.com and Ticker.com from company press releases, filings and corporate websites. Market data: BATS Exchange. Inc