Stock indices went into positive territory on Wednesday as investors await the Federal Reserve's policy decision and hope that the situation in Cyprus can improve without rocking trust in the banking systems in other countries.
Yesterday, the Cyprus parliament resoundingly rejected a crucial 10 billion euro bailout package. The hugely controversial provision that would seize up to 10% of Cypriot savers' bank deposits was struck down, even after softening the blow on everyday people by exempting the first 20,000 euros of deposits. The 17-member Eurogroup of finance ministers will reconvene to come up with a more palatable rescue package. The European Central Bank also meets today in Frankfurt to consider giving Cyprus more time and liquidity for its banks. Meanwhile, the Cypriot finance minister is seeking aid from Russia.
American equity indices might rise for the first time since Thursday. The Dow
(INDEXDJX:.DJI) is up slightly in pre-market trading, with futures up 0.22% at 14,420. Before the opening bell, S&P 500
(INDEXSP:.INX) futures rose 0.23% to 1,545.80 and Nasdaq
(INDEXNASDAQ:.IXIC) futures rose 0.44% to 2,791.75.
The Fed will release its policy statement and economic projections this afternoon at 2 p.m. EDT. Chairman Ben Bernanke's press conference takes place 30 minutes later. Most predict that the Fed will keep key policies that are in place, such as record low rates and quantitative easing, unchanged until the fourth quarter of this year at the earliest. The central bank's economic assessment might get more attention. If the Fed's outlook is largely positive, investors and traders might fear that easy monetary policy and $85 billion of monthly asset purchases might come to an end soon, precipitating a stock sell-off. On multiple occasions, however, Bernanke and others have assured investors that monetary stimulus isn't going anywhere anytime soon.
European stocks reversed losses of the last three days while Asian markets were mixed overnight. The Shanghai CSI 300 Index
(SHA:000300) ended the day up 3.37%, its best performance in two months. US oil futures are up 0.69% ahead of the Energy Information Administration's assessment of American crude oil stockpiles.
British jobless claims fell by 1,500 to 1.54 million. A steeper decline of 5,000 was expected.
The Office of the Comptroller of the Currency, a a powerful banking regulator, downgraded JPMorgan Chase's
(NYSE:JPM) management, indicating that its abilities are insufficient to handle the universal bank. The regulator cited the notorious London Whale debacle as a key reason for the downgrade.
(NASDAQ:YHOO) is reportedly in talks to acquire a controlling stake in video site Dailymotion from France Telecom-Orange. If successful, this would be CEO Marissa Mayer's biggest deal since coming to Yahoo in July. Dailymotion is valued at $300 million.
Shares of Adobe
(NASDAQ:ADBE) rallied 5.52% in the pre-market after the Photoshop maker reported better-than-expected earnings. Sales for the fiscal quarter that ended March 1 rose to $1.01 billion. Adjusted earnings per share was $0.35.
No positions in stocks mentioned.
The information on this website solely reflects the analysis of or opinion about the performance of securities and financial markets by the writers whose articles appear on the site. The views expressed by the writers are not necessarily the views of Minyanville Media, Inc. or members of its management. Nothing contained on the website is intended to constitute a recommendation or advice addressed to an individual investor or category of investors to purchase, sell or hold any security, or to take any action with respect to the prospective movement of the securities markets or to solicit the purchase or sale of any security. Any investment decisions must be made by the reader either individually or in consultation with his or her investment professional. Minyanville writers and staff may trade or hold positions in securities that are discussed in articles appearing on the website. Writers of articles are required to disclose whether they have a position in any stock or fund discussed in an article, but are not permitted to disclose the size or direction of the position. Nothing on this website is intended to solicit business of any kind for a writer's business or fund. Minyanville management and staff as well as contributing writers will not respond to emails or other communications requesting investment advice.