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

A rise up from losses after the Fed minutes are released


InvestorPlace Market RecapWhat 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 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) was up slightly after the bell despite announcing it had swung to an $8.85 billion loss 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) which released dismal results and guidance and dug itself a 5% hole Wednesday.

Housing news and strong earnings bolstered the share of luxury homebuilder Toll Brothers (NYSE:TOL), which jumped nearly 4% after posting top- and bottom-line numbers 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) and Hovnanian (NYSE:HOV) both gaining 4% on the day, and KB Home (NYSE:KBH) up about 3%.

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

Business and management solutions provider Intuit (NASDAQ:INTU), 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) continued its torrid 2012 run, gaining 4% Wednesday after announcing an arrangement with eBay‘s (NASDAQ:EBAY) 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), (NYSE:CRM) and Dependable Dividend Stock Hormel (NYSE:HRL).

Three Up

  • Zynga (NASDAQ:ZNGA): Up 9.8% (29 cents) to $3.26.
  • Chico’s (NYSE:CHS): Up 6.6% ($1.13) to $18.21.
  • Nokia (NYSE:NOK): Up 4.4% (12 cents) to $2.88.

Three Down

  • Express (NYSE:EXPR): Down 11.1% ($1.87) to $15.03.
  • Yelp (NYSE:YELP): Down 5.95% ($1.13) to $17.87.
  • Sprint (NYSE:S): Down 3.9% (20 cents) to $4.88.

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

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