Stocks opened this morning with a surprise from the Peoples Bank of China.
Although a holiday is Asia has kept Hong Kongs Seng and Chinas Shanghai
Composite closed, it did not keep the Central Bank from announucing a quarter
percentage point hike to its one-year deposit and lending rates. The new
benchmark one-year lending rate is 6.31%. China was not the only country to make
headlines today. Just two weeks after the resignation of Portugals Prime
Minister, Moodys downgraded Portugals debt from A3 to Baa1 with reports of
uncertainty in the political outlook of the country. The European Central Bank
is set to meet on Thursday and investors will look for further details from the
meeting to assist in gauging the situation abroad. Concerns abroad are offset
today as a merger in the semiconductor sector has given a boost to the market
with news that Texas Instruments will reportedly pay $6.5 billion for National
Semiconductor increasing its shares from $14 to $25. Unfortunately the news has
been overshadowed by the implications of a rebalancing of the Nasdaq 100 index.
The rebalance is expected to take effect on May 2 and will reduce Apples weight
close to 40%. The index will increase weight to Google, Intel, Microsoft and
Oracle while reducing Apples weight from 20% to 12%. The Federal Reserve
released its minutes from the March 15th policy meeting this afternoon. The
minutes confirmed that in June, as planned, the Fed will wind down its asset
buying program and raised speculation that interest rates may be raised in the
future amid rising inflation. At close the major market indexes continue to
trend mixed. The Dow dropped 6.13 points or 0.05% to 12393.90. The Nasdaq gained
2.00 points or 0.07% to 2791.19. The S&P 500 decreased by 0.24 or 0.02% to
1332.63. The U.S. Treasuries 10-year yield gained 0.06 to 3.49%. Oil decreased
by 0.62 to $107.85 a barrel. The U.S. dollar declined by 0.0001 to the Euro.
Author: Pamela Frost
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