Dow hits new high
POSTED: Wednesday, March 20, 2013 - 11:30am
UPDATED: Wednesday, March 20, 2013 - 11:34am
NEW YORK (CNNMoney) — The Dow rose to a fresh trading high Wednesday ahead of the latest statement from the Federal Reserve.
The Dow Jones industrial average gained 0.5 percent, rising to a new intraday record high of 14,545. The Dow recently hit a string of record highs in its longest winning streak since 1996. The S&P 500 and the Nasdaq both rose about 0.6 percent Wednesday.
All three major indexes are up between 9 percent and 11 percent so far this year in a rally that has largely been driven by the Fed's stimulus policies.
"The expectation is that the Fed will deliver what the market wants," said Quincy Krosby, market strategist with Prudential Financial, highlighting the $85 billion worth of Treasuries the Fed has been buying each month. "They're expecting the status quo."
Following a two-day meeting, the central bank will release its regular policy statement and update its economic forecasts at 2:00 p.m. ET. Fed chairman Ben Bernanke will take questions during a press conference thirty minuets later.
Despite improving economic data, Bernanke is expected to reiterate his view that the economy is weak and needs support.
Krosby cautioned that stocks could come under pressure later in the day assuming Bernanke sticks to the script.
"We'll have to watch to see if we pull back in afternoon as investors take some profit from these gains," said Krosby.
Investors will also be monitoring developments out of Cyprus Wednesday after lawmakers voted against a tax on bank deposits, calling a bailout deal into question.
But investors have been increasingly sanguine about the prospect of financial contagion spreading from the tiny island nation to larger economies in the euro area.
"Cyprus has a bit of time to go back to the drawing board and come up with a solution to its problems," said Nick Stamenkovic, strategist at RIA Capital Markets in Edinburgh, Scotland. "The market seems to take the view that the problem is relatively contained."
In corporate news, FedEx widely missed earnings estimates and cut its outlook for the year. The company is often viewed as a bellwether for the broader economy due to the global scope of its business. FedEx also said it may temporarily ground some aircraft. Shares of rival UPS also fell.
BlackBerry shares jumped 5 percent after analysts at Morgan Stanley upgraded the stock. The company will soon start selling its new Z10 smartphone to U.S. customers.
Shares of Lennar rose after the homebuilder reported better-than-expected earnings.
General Mills shares gained after the packaged food company said sales and earnings rose in the most recent quarter.
Adobe Systems shares jumped a day after the graphics software maker beat earnings estimates.
European markets were higher in afternoon trading, while Asian markets posted gains. The Shanghai Composite added 2.7 percent and Hong Kong's Hang Seng advanced 1 percent. Tokyo's stock market was closed for the first day of spring.
The yield on the 10-year Treasury note edged higher to 1.95 percent. The U.S. dollar fell versus the euro and the U.K. pound, but rose versus the Yen. Oil prices edged higher while gold prices declined.