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Market Surged Wednesday on Yellen’s Confidence

This is a syndicated repost courtesy of Money Morning. To view original, click here. Reposted with permission.

The Dow Jones today ended up 1.00% to 16,424.65 on U.S. Federal Reserve Chair Janet Yellen’s comments that the U.S. economy was on the rise. Dow Jones Today Yellen said the Fed expects the economy to reach maximum employment and meet inflation targets by the end of 2016. The Fed predicts an unemployment rate between 5.2% to 5.6% and an annual inflation target between 1.7% and 2%. The Standard & Poor’s 500 Index rose 1.05% to 1,862.31, and the Nasdaq rose 1.29% to 4,086.23. Here’s your recap of today’s major market events:

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  1. An Impressive Debut: Class A shares of Moelis & Co. (NYSE: MC) began trading today and jumped 5.6% from its offering price. The boutique investment bank, headed by dealmaker Ken Moelis, raised $162.5 million, pricing 6.5 million shares at $25 a share. Bloombergreports that Ken Moelis will retain 95% control of the firm’s voting position by holding a large share of B-class shares, which were not part of the IPO and count for 10 votes each. Moelis defended the unusual share structure for the company, saying that he is “protecting the investors.”
  2. Yahoo for Yahoo!: Shares of Yahoo! Inc. (Nasdaq: YHOO) surged after reporting revenue growth for the first time in more than a year. During its first-quarter earnings report, the company cited growth fueled by display-ad revenue excluding traffic commissions, which increased 2% from the same quarter last year. The company also benefitted from a surge in revenue from Chinese e-commerce giant Alibaba. Yahoo holds a 24% stake in Alibaba, and it will sell 10% of its share during the e-company’s initial public offering, according to existing terms. Alibaba may file its intent to go public as soon as next Monday.
  3. Vegetarians Suffer Too: According to the Wall Street Journal, food produce prices are soaring, placing a strain on Americans as the summer months approach. According to the numbers, lettuce will increase by 30%, avocados by 28%, and broccoli by 22%. Corn prices are likely to surge another 14%. The paper explains that the California drought, which has entered its third year, will create yet another difficult growing season for farmers and ripple across the country. Last week, we reported how beef and pork prices are also set to surge this summer, threatening discretionary spending at a time when the economy is trying to show some life. To offset rising food costs, here’s how you can profit…

  1. A Suit to Watch: IBM is going to court… as the defendant. That’s because Mexican mobile phone operator Iusacell SA de CV has sued IBM Corp. (NYSE: IBM) on fraud allegations. The plaintiff claims IBM made a number of false claims that led to a $2.5 billion loss for the Mexican phone company. Terms of the suits are still unclear due to the heavy number of redactions in court filings.
  2. It’s On: Shares of SodaStream International Ltd. (Nasdaq: SODA) soared as much as 11% today. The boost followed news by an Israeli paper that the household soda-machine manufacturer is looking to sell a minority stake to a major soft-drink producer. According to Calcalist, the company aims to sell a 10% to 16% stake at a $1.1 billion valuation. Possible investors mentioned in the report included Dr. Pepper Snapple Group (NYSE: DPS), PepsiCo Inc. (NYSE: PEP), and Starbucks Corp. (Nasdaq: SBUX).

Read the rest of this post at Dow Jones Today Surges on Yellen’s Confidence published by Money Morning – Only the News You Can Profit From.

Wall Street Examiner Disclosure: Lee Adler, The Wall Street Examiner reposts third party content with the permission of the publisher. The opinions expressed in these reposts are not those of the Wall Street Examiner or Lee Adler, unless authored by me, under my byline. I curate posts here on the basis of whether they represent an interesting and logical point of view, that may or may not agree with my own views. Some of the content includes the original publisher's promotional messages. No endorsement of such content is either expressed or implied by posting the content. All items published here are matters of information and opinion, and are neither intended as, nor should you construe it as, individual investment advice. Do your own due diligence when considering the offerings of information providers, or considering any investment.

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