Let the Easing Continue! — Wednesday’s IP Market Recap

by Marc Bastow | December 12, 2012 5:02 pm

InvestorPlace Market Recap[1]Markets reacted positively for most of the day on the much anticipated[2] announcement that the Federal Reserve would continue providing the U.S. economy with more stimulus in the form of a continuation of its quantitative easing policy.

The central bank said it would continue its quantitative easing program by buying $45 billion of Treasuries each month beginning in 2013, and also would continue buying $40 billion of mortgage-backed securities. It expects to keep rates low until the unemployment rate, now at 7.7%, hits 6.5%.

But the news wasn’t positive enough to offset more fiscal cliff posturing, as House Speaker John Boehner warned his congressional colleagues about heading out on a Christmas break anytime soon.

By the end of the day the markets were mixed. The Nasdaq came out the big loser, down 0.28% to 3,013.82, the S&P 500 managed to hold on to its modest gains, up a fraction at 1,428.48, and the Dow lost a fraction to 13,245.45.

Trading in shares of Berkshire Hathaway (NYSE:BRK.A[3], BRK.B[4]) was briefly halted ahead of an announcement that Warren Buffett’s firm bought 9,200 of its Class A shares for $131,000 apiece[5] from the estate of a longtime shareholder. All the other investors who stayed in the stock despite the news were rewarded with 2.5% jump in the stock.

Netflix (NASDAQ:NFLX[6]) continued a recent run after its partnership agreement with Disney (NYSE:DIS[7]), rising more than 5% on a Morgan Stanley analyst report targeting $105 per share. NFLX has advanced around 16% in the past month.

Coinstar (NASDAQ:CSTR[8]), which announced that its new video streaming service[9] will be priced at $8 per month, the same as Netflix, rose more than 2%.

In earnings news, Costco (NASDAQ:COST[10]) posted better-than-expected earnings and revenue for its fiscal first quarter, though shares finished down fractionally. Fellow discount retailers Walmart (NYSE:WMT[11], -2.8%) and Target (NYSE:TGT[12], -1.5%) trailed even worse.

Lastly, DuPont (NYSE:DD[13]) shares rose nearly 2% after announcing a $1 billion share buyback program and updating its 2012 earnings guidance to the high end of its previous range.

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]: https://www.investorplace.com/hot-topics/investorplace-market-recap/
  2. much anticipated: http://slant.investorplace.com/2012/12/forget-the-fed/
  3. BRK.A: http://studio-5.financialcontent.com/investplace/quote?Symbol=BRK.A
  4. BRK.B: http://studio-5.financialcontent.com/investplace/quote?Symbol=BRK.B
  5. bought 9,200 of its Class A shares for $131,000 apiece: https://investorplace.com/2012/12/berkshires-buyback-a-1-2b-bargain/
  6. NFLX: http://studio-5.financialcontent.com/investplace/quote?Symbol=NFLX
  7. DIS: http://studio-5.financialcontent.com/investplace/quote?Symbol=DIS
  8. CSTR: http://studio-5.financialcontent.com/investplace/quote?Symbol=CSTR
  9. new video streaming service: https://investorplace.com/2012/12/redbox-instant-sets-price-at-8-month/
  10. COST: http://studio-5.financialcontent.com/investplace/quote?Symbol=COST
  11. WMT: http://studio-5.financialcontent.com/investplace/quote?Symbol=WMT
  12. TGT: http://studio-5.financialcontent.com/investplace/quote?Symbol=TGT
  13. DD: http://studio-5.financialcontent.com/investplace/quote?Symbol=DD
  14. TSL: http://studio-5.financialcontent.com/investplace/quote?Symbol=TSL
  15. ZNGA: http://studio-5.financialcontent.com/investplace/quote?Symbol=ZNGA
  16. RIMM: http://studio-5.financialcontent.com/investplace/quote?Symbol=RIMM
  17. CIE: http://studio-5.financialcontent.com/investplace/quote?Symbol=CIE
  18. LF: http://studio-5.financialcontent.com/investplace/quote?Symbol=LF
  19. STX: http://studio-5.financialcontent.com/investplace/quote?Symbol=STX

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