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Market Update

For Now Fed Punts, Investors Hope Uncertainty Ends Soon

Author: Nichole Harper
Last Update: 3:15 PM ET September 17 2015

3:15 PM New York City, New York – U.S. market indexes shot up while after the Fed policy makers overwhelmingly voted to not hike rates. However, Fed held out for a rate hike before the year-end. Volatile crude oil traded near $47 a barrel in New York. European markets lacked conviction.

U.S. stocks soared after Fed policymakers decided to leave rates unchanged but said a rate hike is possible before the year-end.

Fed in a 9-1 vote announced to hold rates and decided to keep rates steady largely on the global headwinds that could provide additional downward pressure to the economy and keep inflationary forces at bay.

U.S. indexes have been volatile for the last two months and intense debate has unfolded on Wall Street with passionate arguments favoring and against rate hike.

Fed is scheduled to meet two more times this year, October 27-28 and December 15-16. And analysts are expecting the rate is hike is not likely to happen at the next meeting because no press briefing is scheduled.

Near zero rates since the depth of the financial crisis in December 2008, has helped the economy to rebound and has provided a vital support for the stock prices to move higher.

However, if rates are kept too low for too long could lead to another bubble in asset prices especially in the housing market.

On the economic front, seasonally adjusted U.S. weekly jobless claims fell 11,000 to 264,000 from the revised claims of 275,000 in the previous week, Department of Labor said.

Housing starts in August fell 3% to 1,126,000 annual rate from the revised July estimate but surged 16.6% from a year ago month, the Department of Commerce said.

Housing permits in August jumped 3.5% from the revised July rate and soared 12.5% from a year ago month rate to 1,040,000.

Separately, the department reported preliminary current account deficit narrowed to $109.7 billion in the second-quarter from the revised $118.3 billion in the first-quarter.

Deficit on goods and services in the quarter fell to $130 billion and exports rose to $384.8 billion and export declined to $573.1 billion.

On Wall Street, Tollbooth Strategy Index rose 19.45 to 10,515.92.

S&P 500 index rose 3.13 or 0.2% to 1,998.36 and the Nasdaq Composite Index increased 16.51 or 0.3% to 4,905.81.

Crude oil in New York fell 56 cents to $46.57 a barrel and gold slid $1.70 to $1,117.30 an ounce.

U.S. Movers

Oracle Corporation (ORCL) dropped 3.1% or $1.19 to $37.03 after the enterprise software services provider reported net revenues in the first-quarter ending in August slipped 2% from a year ago to $8.45 billion.

Net income in the quarter declined 19.7% to $1.75 billion or 40 cents per diluted share compared to $2.18 million or 48 cents from the same quarter last year.

The company said total hardware revenues in the quarter fell 3% to $1.1 billion and software license updates and product support revenues slid 1% to $4.7 billion but services revenues rose 1% to $862 million from a year ago period.

Oracle said total on-premise software and cloud revenues in the quarter decreased 2% to $6.5 billion, new software licenses revenues tumbled 16% to $1.15 billion and cloud software-as-a-service and platform-as-a-service surged 34% to $451 million.

Perrigo Company Plc decreased 65 cents to $181.74 after the drug maker said its board of directors rejected the unsolicited tender offer of $27 billion from Mylan NV and said “the offer substantially undervalues the company.”

Chief executive officer Joseph Papa said the offer is “neither compelling, nor accretive” and “Perrigo has never refused to engage” with Mylan, but “offers have simply not been a basis for discussions.”

European Markets

U.K. retail sales in August increased 0.2% from July to £27.4 billion and online sales jumped 7.4% from a year ago month, the Office for National Statistics said.

Seasonally adjusted construction activities in July rose 1% from a year ago month in the euro area and 0.7% in the wider region of EU28.

In June, activities in EU area fell 1.2% and 0.5% in the EU28, the Statistical Office of the European Communities reported.

Compared to year ago month, activities in EU area grew 1.8% and 2.3% in the wider region of EU28.

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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