Fed Minutes Spark Hope of QE3 — Wednesday’s IP Market Recap

by Marc Bastow | August 22, 2012 5:15 pm

InvestorPlace Market Recap[1]What was turning into a second straight day of market losses did an about-face when minutes released from the most recent Federal Reserve meeting showed that the central bank is taking into consideration a third round of quantitative easing (QE3) and tweaking other guidelines on Fed policy — in particular, additional means of communications to the markets — heading into the third quarter.

With that, markets that had been down all day despite an improvement in home sales[2] in July over June suddenly turned the tables, cutting into losses and even breaking out for gains.

At the end of the day, the Nasdaq rallied to end up 0.21% at 3,073, while the S&P 500 rose fractionally to end at 1,413. The Dow Jones could not make it all the way back, dropping 0,23% to 13,172.

Struggling technology giant Hewlett-Packard (NYSE:HPQ[3]) was up slightly after the bell despite announcing it had swung to an $8.85 billion loss[4] due in part to a $1.08 billion writedown of its investment in EDS. Net revenues fell in the Q3 to $29.7 billion, just under the $30.1 billion predicted by analysts, according to Thomson Reuters.

The news came on the heels of Tuesday’s earnings report by Dell (NASDAQ:DELL[5]) which released dismal results and guidance[6] and dug itself a 5% hole Wednesday.

Housing news and strong earnings bolstered the share of luxury homebuilder Toll Brothers (NYSE:TOL[7]), which jumped nearly 4% after posting top- and bottom-line numbers[8] beating Street estimates. Toll’s numbers reflected an increase of 39% in homes delivered and closed, and contracts for new homes jumped 59% — both figures trumping last year’s results. The rest of the sector was lifted, with PulteGroup (NYSE:PHM[9]) and Hovnanian (NYSE:HOV[10]) both gaining 4% on the day, and KB Home (NYSE:KBH[11]) up about 3%.

American Eagle (NYSE:AEO[12]) gained 6% even though earnings fell from last year[13]; however, revenues were in line with Street estimates, and forecasts were better than expected.

Business and management solutions provider Intuit (NASDAQ:INTU[14]), also the maker of TurboTax, managed to squeeze out a 1% gain on the day despite missing earnings and revenue targets. However, the company did hike its quarterly dividend 13% to 17 cents per share.

Discover Financial Services (NYSE:DFS[15]) continued its torrid 2012 run[16], gaining 4% Wednesday after announcing an arrangement[17] with eBay‘s (NASDAQ:EBAY[18]) PayPal to make its system more widely available to customers. DFS shares have returned 60% year-to-date.

Notable earnings out Thursday include Krispy Kreme (NYSE:KKD[19]), Salesforce.com (NYSE:CRM[20]) and Dependable Dividend Stock[21] Hormel (NYSE:HRL[22]).

Three Up

Three Down

Marc Bastow is an Assistant Editor at InvestorPlace.com. As of this writing, he did not hold a position in any of the aforementioned securities.

  1. [Image]: http://investorplace.com/hot-topics/investorplace-market-recap/
  2. an improvement in home sales: http://investorplace.com/2012/08/july-existing-homes-sales-rise-miss-forecasts/
  3. HPQ: http://studio-5.financialcontent.com/investplace/quote?Symbol=HPQ
  4. announcing it had swung to an $8.85 billion loss: http://investorplace.com/2012/08/hewlett-packard-no-steps-forward/
  5. DELL: http://studio-5.financialcontent.com/investplace/quote?Symbol=DELL
  6. dismal results and guidance: http://investorplace.com/2012/08/dell-earnings-down-forecast-disappoints/
  7. TOL: http://studio-5.financialcontent.com/investplace/quote?Symbol=TOL
  8. after posting top- and bottom-line numbers: http://investorplace.com/2012/08/toll-brothers-earnings-home-orders-jump/
  9. PHM: http://studio-5.financialcontent.com/investplace/quote?Symbol=PHM
  10. HOV: http://studio-5.financialcontent.com/investplace/quote?Symbol=HOV
  11. KBH: http://studio-5.financialcontent.com/investplace/quote?Symbol=KBH
  12. AEO: http://studio-5.financialcontent.com/investplace/quote?Symbol=AEO
  13. earnings fell from last year: http://investorplace.com/2012/08/american-eagle-outfitters-shares-up-on-profit-outlook/
  14. INTU: http://studio-5.financialcontent.com/investplace/quote?Symbol=INTU
  15. DFS: http://studio-5.financialcontent.com/investplace/quote?Symbol=DFS
  16. its torrid 2012 run: http://investorplace.com/2012/08/discover-financials-crazy-climb-cant-continue-can-it/
  17. announcing an arrangement: http://investorplace.com/2012/08/discover-strikes-a-deal-with-paypal/
  18. EBAY: http://studio-5.financialcontent.com/investplace/quote?Symbol=EBAY
  19. KKD: http://studio-5.financialcontent.com/investplace/quote?Symbol=KKD
  20. CRM: http://studio-5.financialcontent.com/investplace/quote?Symbol=CRM
  21. Dependable Dividend Stock: http://investorplace.com/dividend-paying-stocks/
  22. HRL: http://studio-5.financialcontent.com/investplace/quote?Symbol=HRL
  23. ZNGA: http://studio-5.financialcontent.com/investplace/quote?Symbol=ZNGA
  24. CHS: http://studio-5.financialcontent.com/investplace/quote?Symbol=CHS
  25. NOK: http://studio-5.financialcontent.com/investplace/quote?Symbol=NOK
  26. EXPR: http://studio-5.financialcontent.com/investplace/quote?Symbol=EXPR
  27. YELP: http://studio-5.financialcontent.com/investplace/quote?Symbol=YELP
  28. S: http://studio-5.financialcontent.com/investplace/quote?Symbol=S

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