Stocks Post Solid Gains on Apple, Fed
NEW YORK ( TheStreet) -- Stocks finished higher Wednesday with the Nasdaq outperforming the broad market because of a massive post-earnings rally in Apple(AAPL) .
The results of the Federal Reserve's latest policy meeting caused some fluctuation in the major U.S. equity indices but there wasn't a dramatic reaction to the news that the central bank was leaving its interest rate target intact. The Fed also tweaked the language of its policy statement and adjusted some of its economic projection.
Chairman Ben Bernanke combated that perception to some extent in his press conference though, once again leaving the door for more quantitative easing ever so slightly ajar during the question-and-answer session.
"Bernanke went out of his way at least four times to say that QE3 is still on the table, so I think we can take from all of this that QE3 is still on the table," said John Canally, strategist at LPL Financial. "And that's not by mistake,
The Nasdaq soared 68 points, or 2.3%, to settle at 3030, thanks largely to Apple's outstanding quarterly earnings report as the company sold more than 35 million iPhones, far exceeding consensus expectations.
The Fed dominated the afternoon headlines though . The central bank raised its GDP forecast for 2012 to a growth range of 2.4-to-2.9% from a prior projection of 2.2-to-2.7%. It also gave a more optimistic outlook for the jobs market, estimating the unemployment rate moving down to 7.8-8% this year from the expectation of 8-8.2% it gave in January, and boosted its inflation outlook slightly, going to an increase of 1.9-2% from a range of 1.4-1.8%.
There was a more hawkish tone to the proceedings as seven members of the Fed's rate-setting arm now expect a tightening of interest rates in 2014, up from five in January but this adjustment was offset by Bernanke's comments about providing more monetary stimulus if necessary.
The view that QE3 was likely off the table caused some gyrations in precious metals but the June gold contract settled down $1.50 at $1642.30 after running as low as 1625. The dollar traded slightly higher against a basket of currencies, with the dollar index up 0.08%. The benchmark 10-year Treasury note lost 2/32, with the yield rising to 1.989%.
Breadth within the Dow was positive, with 24 of the index's 30 components on the rise, led by Boeing(BA) , which rose more than 5% after its quarterly report; Alcoa(BA) , du Pont (DD) , IBM(IBM) , Intel(INTC) , and American Express (AXP) .