Last update: 11-Dec-2013 10:53 pm
Wednesday, December 11, 2013
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Stock market closes higher; Microsoft surges
NEW YORK—A big jump in Microsoft helped lift the Dow Jones industrial average yesterday. Microsoft had its biggest gain in four years after CEO Steve Ballmer said he would retire. Ballmer took the helm of the software company from founder Bill Gates in 2000. The company has struggled to adapt as consumers switch from desktop computing to mobile devices.
The giant software company is part of the 30-member Dow and its surge contributed more than a third of the index’s advance. The Dow closed up 46.77 points, or 0.3 per cent, at 15,010.51. The index closed down 0.5 per cent for the week and is 3.2 per cent lower for the month. Stocks have sagged in August on concerns that the Federal Reserve will start to pull back on its economic stimulus. The Fed has been buying US$85 billion in bonds every month to hold down interest rates and encourage lending.
Minutes from the Fed’s July meeting released on Wednesday failed to give investors any clear indication of when the central bank will start slowing its bond purchases. Some investors are using the summer slump as an opportunity to buy stocks at less expensive prices, said Joe Bell, a senior equity analyst at Schaeffer’s Investment Research. Stocks climbed to record highs at the start of the month.
A boom in housing has supported this year’s rally in stocks. Now, the drop in sales has traders worried that the US housing recovery could falter because of higher mortgage rates. Traders reacted to the drop in home sales by buying bonds and gold, investments that become more attractive when the economy appears weaker. The yield on the ten-year Treasury note declined to 2.82 per cent from 2.89 per cent late Thursday. The price of gold rose US$25, or 1.8 per cent, to US$1,395 an ounce, the highest in two months.
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