Published June 21, 2012
Stocks ended Wednesday right where they started, but the modest moves on Wall Street disguised an eventful day driven by Federal Reserve policymakers and headlines out of Europe.
The Fed said it would extend its program of lowering long-term interest rates to help the economy. Operation Twist, set to expire at the end of the month, will now go through the end of the year.
Investors were expecting that announcement but hoping for something greater. A third round of bond buying, otherwise known as quantitative easing, would have likely rallied the bulls, but they sought some relief in comments from Fed chairman Ben Bernanke that he is ready to act further if the economy get worse.
Wall Street also got a boost on chatter in Europe that Germany may be willing to make further concessions to help its struggling eurozone partners in the south.
U.S. stock futures Thursday morning are pushing modestly lower.
In the Fed announcement yesterday, central bank policymakers estimated that the nation's unemployment rate would stay near 8% through 2014. Investors get another clue about the job market this morning. Jobless claims are expected to fall back by 3,000 to 383,000 Americans seeking first-time unemployment benefits last week.
Tens of millions of Americans have dealt with the recession by "doubling up." The Census Bureau finds that from 2007 to 2010, there was an 11% increase in adults living together. That means 69 million American adults are roommates.
But the ongoing trend of young adults moving back in with their parents is more likely what's hurting the housing market. Nearly 16 million young adults have taken up their parents' basements or their old childhood bedrooms instead of buying new homes.
It's tea time for Starbucks (SBUX). It's opening its first Tazo Tea store in Seattle later this year, adding tea to its mix of recent acquisitions of Evolution Fresh fruit juices and La Boulange French bakery.
J.D. Power and Associates says we're more happy with our new cars and trucks. Its 2012 Initial Quality survey shows that overall auto quality improved among the 2012 models at the fastest rate since 2009.
The average number of problems per 100 vehicles reported within the first 90 days fell by 5%, to 102 from 107 last year.
Lexus, Jaguar, Porsche, and Cadillac received the best scores. Mercedes' Smart Car and Fiat had the most customer complaints in the first three months of new car ownership.