Mar 20 - Summary of business headlines: Dow rises for second day as Bernanke keeps digging in his wallet; Oracle disappoints, FedEx lowers guidance, Lennar easily beats; Cyprus banks close for the week. Conway G. Gittens reports.
Wall Street adds to the day's gains after the Federal Reserve says it will keep on buying $85 billion in debt per month. The Dow tried, but failed to close at a new record as stocks finished off the highs of the day. The Federal Reserve says the economy is getting stronger, but admits unemployment is still too high and the recovery is still not strong enough to make it on its own. One reason noted in the Fed's statement following a two-day meeting - fiscal cut backs from Washington. Fed Chief Ben Bernanke: SOUNDBITE: FEDERAL RESERVE CHAIRMAN BEN BERNANKE (ENGLISH) SAYING: "We take as given what the fiscal authorities are doing. The economy is weaker, job creation is slower than it would be otherwise and so that is one of the reasons that our policy has been as aggressive as it is. That being said, as I've said many times, monetary policy cannot offset a fiscal restraint of that magnitude and so the final outcome will be worse, in terms of jobs, than would have been the case with less fiscal restraint." On the earnings front, sales of new and internet-based software dropped last quarter for Oracle, leading to a profit miss for the world's third largest software provider. FedEx lowered its full-year forecast as customers continue to shift to lower-cost shipping methods. And new orders surging 34 percent at homebuilder Lennar. Net income tripled to $57-1/2 million and total sales surged 37 percent to just under a billion dollars as the company benefits from tight supplies, rising demand, and higher selling prices. Looking at how these stocks fared: Oracle climbed ahead of its results but is likely to give that up on Thursday. FedEx was down just about 7 percent. But Lennar was up almost 5 percent. On to Europe now - Cyprus banks will remain closed for the rest of this week - but contagion fears eased slightly -and that was reflected by higher stock prices in Germany and France.