Stocks advanced broadly Tuesday, after minutes from the Federal Reserve’s last interest rate policy meeting indicated the Fed saw no threats to the economy that were unknown to investors at the time.
Fear eased that the Fed had staged its surprise interest rate cut Sept. 18 to avert a crisis of mysterious dimensions.
On the other hand, Tuesday’s trading suggested that the Fed’s pledge to ease a credit crunch and protect the broad economy is not being saluted by all investors.
Among the biggest winners in the Dow’s 120-point gain were oil giant Exxon Mobil and aluminum producer Alcoa. Both companies have benefited from post-Fed rallies in commodity prices that some analysts regard as inflationary.
On the other hand, Citigroup lost ground and JPMorgan Chase posted a modest advance among the 30 Dow industrials. And consumer stocks Wal-Mart Stores and Home Depot were losers.
Alcoa shares rose $1.42, to $39.72, in Tuesday’s session.
After the close of trading, the company posted earnings per share of 63 cents, 2 cents a share less than the consensus estimate of analysts compiled by Reuters Estimates.
Alcoa said it plans to buy back as much as 25 percent of its stock, worth approximately $6.7 billion.
In late trading International Paper dropped after the company said it expects to come in short of analyst expectations for its third-quarter profits.
Oil producer Chevron lost ground after hours. The company said third-quarter profit fell “significantly” from the second-quarter level.
Treasury securities retreated as bond investors interpreted the Fed minutes as providing no new evidence that the central bank would cut interest rates again at its next meeting, set for Oct. 30-31.
TREASURY AUCTIONS: Interest rates rose at the weekly auctions of 3- and 6-month Treasury bills.
The discount rate on 3-month bills was 3.92 percent, up from 3.84 percent at last week’s auction. The rate for 6-month bills was 4.09 percent, up from 4.00 percent last week.
The coupon-equivalent investment rates at Tuesday’s auction were 4.03 percent for 3-month bills and 4.25 percent for 6-month bills.
