On Wednesday, AT&T Inc. (T, +0.09%) made an impressive exit off the Dow Jones Industrial Average (DJIA). The stock ended its time with the DJIA with a big increase in trading volume of 47.8 million shares, up 2.1 percent. This marked almost double of a full day average of 23.5 million shares. According to the current Dow divisor, AT&T’s stock gain of sixty nine cents helped to add more than 4 points to the Dow which rallied over 200 points on the day. Interestingly, AT&T used to be a part of the Dow from March 1939 until April 2004. The company was initially known as American Telephone & Telegraph and the name was eventually changed to AT&T Corp. in April 1994. In November 2005, AT&T reentered the blue chip Dow index. Since that time, the stock of AT&T has climbed 38 percent while in the same period; the DJIA has advanced 68 percent. With AT&T exiting the Dow Jones and Apple stepping in its place, the shares of Apple Inc. (AAPL) will definitely be in the spotlight on Thursday as the tech giant makes its debut as a component of the blue chip index. Being included in this index can definitely be viewed as an acknowledgement of Apple’s strength as a brand and a company.
The wait is over and the Federal Reserve has now spoken. As a result, U.S. stocks closed higher on Wednesday after there was an indication by the Federal Open Market Committee that interest rate hikes will occur at a slower pace than expected by investors. In their statement, the Fed removed the word ‘patient’ and it is expected that interest rates will be increased only in September. As a result, the Dow Jones Industrial Average (DJIA) traded within a 400-point range but closed up 1.3%, or 227.11 points, higher at 18,076.19. Adding to this surge, 28 of the 30 Dow components finished higher and the biggest gainers on the blue chip index included Chevron Corp. (CVX, +3.42%) and Caterpillar Inc. (CAT, +3.67%). The Nasdaq Composite Index (COMP) also followed the upward trend and advanced 0.9%, or 45.39 points, to close at 4,982.83 while the S&P 500 index (SPX) surged 1.2%, or 25.14 points, at 2,099.42. Led by utilities and energy, all 10 of the index’s sectors finished higher. Prior to the statement by the Fed, the SPX had declined 8 points.
With the U.S. Federal Reserve only likely to increase interest rates in September, the euro (EUR) surged against the U.S. dollar (USD). After the statement release, the greenback declined below its high of 1.059 against the EUR with EUR/USD advancing more than 2 percent to a high of 1.093 after the markets closed. In other currency trading, the U.S. dollar traded higher against the British pound with GBP/USD trading at 1.4658, down 0.60% and down against the yen with USD/JPY trading at 120.88, down 0.40 percent. Against the Australian dollar and the Swiss franc, the greenback declined with USD/CHF down 0.90% to 0.9972 and with AUD/USD up 0.32 percent to 0.7641. Also, the U.S. Dollar Index declined to 96.75 at the close of the market.
Gold prices got a much needed boost on Thursday. This came after the U.S. Federal Reserve signaled that interest rate hikes will not likely take place until September this year. The Fed also stated that a strong U.S. dollar (USD) will also play a vital role in terms of the timing of interest rate hikes. As a result, gold futures for delivery in April traded at $1,170.70 a troy ounce, up 1.69 percent, on the Comex division of the NYMEX. Also on the upside were silver futures for delivery in May which traded at $15.977 a troy ounce, up 2.70 percent while copper for delivery in May declined to trade at 2.600 a pound, down 0.97 percent, on the Comex. This decline came in response to a declining property sector in China which impacts the demand for the red metal. China is the largest copper consumer in the world and they accounted for almost 40 percent of the world’s consumption last year.