Stock market erases losses on Fed signals
After spending most of the day in negative territory, the S&P 500 rebounds to eke out a gain after the release of the minutes of the latest Federal Reserve meeting.
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Earlier in the day, Asian markets closed down after Japan posted a trade deficit for July, reversing a year-ago surplus and adding to signs of a global economic slowdown.
Bond traders have become skittish about the Asian slowdown and the debt crisis in Europe. Investors returned to the haven of U.S. Treasurys, sending the yield on the benchmark 10-year down to 1.72 percent from 1.81 percent late Tuesday.
Riding an improving housing market, high-end homebuilder Toll Brothers reported 46 percent growth in its quarterly net income after delivering more homes at higher prices to its customers. Its stock rose $1.20, close to 4 percent, to $33.01.
Toll Brothers caters to the luxury sector, which has withstood the economic downturn better than others. Its target market includes households that making more than $100,000 a year, with better credit and more job security.
The Commerce Department reported last week that applications for building permits rose to their highest level since August 2008, which signals that construction companies are growing more confident about the housing landscape.
Other homebuilder stocks also made big gains: PulteGroup gained 50 cents, or close to 4 percent, at $13.29 and Lennar rose $1.17, or close to 4 percent, at $32.35.
Among other stocks making big moves Wednesday:
— Dell slumped more than 5 percent and traded near a 52-week low. It was the worst-performing stock in the S&P 500. The computer maker said PC sales remained weak in its fiscal second quarter, and it forecast a disappointing third quarter and lowered its full-year profit forecast. Its stock slid 66 cents to $11.68.
— Williams-Sonoma jumped close 12 percent after the kitchen and home store chain reported a 10 percent jump in profit. Its stock rose $4.45 to $42.68.
— Fifth Third Bancorp's stock shot to a 52-week high after the Fed allowed the bank to raise its dividend and buy back more of its own stock. The Cincinnati regional bank's stock was up 3 percent to $14.81, a jump of 42 cents. The stock had reached $15.02 in morning trading, a high for the past year.
— Discover Financial Services stock gained 4 percent, or $1.43, to $38.43 after announcing a partnership with PayPal. More than 7 million stores that take Discover cards will be able to process PayPal payments beginning next year.