NEW YORK (
) -- U.S. stocks gained Friday, breaking a two-day decline, after Wall Street Journal reporter Jon Hilsenrath wrote that "markets might be misreading the Federal Reserve's messages."
, which had fallen as low as 1,577.70, promptly reversed course on Hilsenrath's story, to close at 1,592.43, a gain of 0.3%. The Journal reporter, apparently paraphrasing Fed officials, said the Fed would act judiciously when deciding when to curb the bond-buying measures that Chairman Ben Bernanke says has helped to resuscitate the economy in the wake of 2008-09 recession. The S&P rose as high as 1,599.19 in morning trading before turning sharply downward at mid-day. The
Dow Jones Industrial Average
was also adding 0.6% to 14,845.04.
Hilsenrath, the Journal's well-sourced economics correspondent who covers the Federal Reserve,
on Wednesday that the central bank would begin reducing its giant bond-buying program by the end of the year.
In the wake of Bernanke's Wednesday press conference, long-term rates spiked while interest-rate futures contracts dropped, indications that investors are troubled by prospects that the Fed is poised to raise short-term interest rates in the near term.
The Journal story appeared to be aimed at easing investor concerns that the Fed is fast readying plans to reduce the stimulus program, a prospect that prompted investors to jump out of equities.
"Mr. Bernanke emphasized that even though the Fed might pull back on bond-buying later this year -- which is akin to easing your foot off the gas pedal of a car -- it would be a long time before it took the more aggressive step of raising short-term interest rates -- which is akin to pressing the brake," Hilsenrath wrote.
Hilsenrath also sought to ease investor fears of an impending hike in borrowing costs and a corresponding spike in mortgage rates, which could deflate the country's nascent housing recovery, writing that "Mr. Bernanke suggested the Fed could keep short-term interest rates near zero even longer than previously planned."
was tumbling 0.1% to 3,361.72 as
plunged 9.3% to close at $30.14 after reporting
that met Wall Street expectations, hiked its dividend, and extended its share buyback program. But the stock plummeted by almost 9.3% to $30.14, as investors fixated on the company's disappointing and flat revenue growth, as its cloud ambitions were met with sluggish-looking results.
shares were both down, with Citigroup shares off 1.8% to $47.06 and Morgan Stanley shares slipping 0.3% to $25.08. Morgan Stanley has received regulatory approvals to complete its purchase of brokerage joint venture Morgan Stanley Smith Barney from Citigroup in a move CEO James Gorman characterizes as a "historic day" for the nation's
shares fell 0.4% to $44.39 after the used car dealership chain booked earnings of 64 cents a share on revenue of $3.31 billion, beating the average Wall Street earnings estimate of 53 cents a share on $2.81 billion in revenue, as same store sales increased by 17%.
surged 2.5% to $24.50 after it and Instagram announced on Thursday that the photo-sharing social network is adding a video component to its network, called Video on Instagram.
shares declined more than 5% to $2.71 after the social videogame maker was cut to "underweight" from "equal weight" by
analysts, who cited concerns that the company's shift to mobile will be more costly and prolonged than previously expected and that the stock's risk-reward proposition is unattractive.
U.S. stocks plunged the most in 19 months Thursday on fears the Fed is working on plans to reduce its bond-buying stimulus program. Bernanke's comments also lent credence to the notion that interest rates may be adjusted upward, that mortgage rates, currently at historic lows, could follow as well.
Written by Andrea Tse in New York
>To contact the writer of this article, click here: