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Stock Market Rallies on Interest Rate Hike, Ahead of the Curve

Strategic Insights

— 2 min read

The stock market continued its upward trajectory yesterday, following Tuesday's Federal Reserve interest rate hike. Major blue-chip companies such as International Paper, General Motors, AT&T, and Coca-Cola benefited from the surge. The Dow Jones industrial average rose 26.09 points to 3,758.98, while the yield on the 30-year Treasury bond fell 3 basis points to 7.23 percent. Despite the market's recovery, key indexes including the S&P 500 and Nasdaq composite still lag behind for the year.

Key Takeaways:

  • The Dow Jones industrial average rose 26.09 points to 3,758.98, with 18 out of 30 component stocks seeing an increase.
  • The broader Standard & Poor's 500 rose 2.79 points to 456.48, but still lags for the year, down 2.14 percent.
  • The Nasdaq composite index rose 5.41 points to 727.31, but also lags behind, down 6.37 percent for the year.
  • International Paper, which rose 1 7/8 to 68 3/8, led the Dow's increased stocks on no discernible news.
  • AT&T, which rose 1 1/2 to 56 3/4, led the S&P 500's increased stocks after winning a multi-billion dollar contract from Bell Atlantic.
  • DSC Communications of Plano, Tex., the loser in the Bell Atlantic project, saw its shares fall by 811/16 to 491/16.
  • Market analyst Dennis Jarrett expects "probably a lot more sideways action for the bond market, which translates into similar action in equities" in the near-term.
  • Currency traders are bearish about the value of the dollar, with David F. DeRosa, a director of foreign exchange trading at the Swiss Bank Corporation, stating that "no one I know -- and I mean no one -- thinks that the Clinton Administration does not have a weak-dollar policy."

Statistics:

  • The Dow Jones industrial average rose by 26.09 points.
  • The yield on the 30-year Treasury bond fell 3 basis points to 7.23 percent.
  • The S&P 500 rose 2.79 points.
  • The Nasdaq composite index rose 5.41 points.
  • International Paper led the Dow's increased stocks, rising 1 7/8 to 68 3/8.
  • AT&T led the S&P 500's increased stocks, rising 1 1/2 to 56 3/4.

Sources:

  • "The New York Times" (no date mentioned)
  • "The Wall Street Journal" (no date mentioned)
  • Dennis Jarrett, market analyst
  • David F. DeRosa, director of foreign exchange trading at the Swiss Bank Corporation
  • "The Favorite Stocks" table in "The New York Times"

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