Summary: Blue chips hit a record high and the S&P 500 was not far behind as Fed Chair Janet Yellen says rate hikes are still far away; FedEx, Lennar rise on earnings; Louder call for DuPont break-up. Conway G. Gittens reports.
The Federal Reserve is keeping interest rates near zero and will continue to do so for a "considerable time" after it puts to end a bond-buying program, on track to end in October. But Fed chair Janet Yellen says when rates hikes do begin they are likely to be swifter than policymakers previously thought. Cary Leahey of Decision Economics says the first rate hike isn't really something the market should be worried about. SOUNDBITE: CARY LEAHEY, SENIOR ADVISER, CHIEF U.S. ECONOMIST, DECISION ECONOMICS (ENGLISH) SPEAKING: "So it's the end of Fed tightenings, not the beginning that killed the market and what kills the market is it doesn't die of old age, it gets murdered by the Federal Reserve in its bed and we are still at least 18 (months) if not two to three years away from that happening." Blue chips set their first lifetime closing high in a month, the S&P 500 traded in record territory but scaled back from that peak, the Nasdaq rallied as well. Economic data taking some pressure off the Fed to start hiking rates: Consumer prices fell for the first time in nearly 1-1/2 years in August, with inflation pressures widely muted. Another report showed homebuilder sentiment hit a near nine-year high in September, with companies reporting a sharp pickup in buyer traffic since early summer. That was exactly the case with Lennar, the second largest U.S. homebuilder. The company sold more homes at higher prices and reported a better-than-expected 47 percent jump in quarterly profit. Lennar's stock advanced, taking shares of other homebuilders with it. Things are getting better at FedEx too. Online shoppers boosted ground shipments, lifting FedEx's profits. Higher shipping prices helped as well. And another price hike is coming early next year. FedEx stock up at the end of the day. Activist investor Nelson Peltz and his Trian Fund Management are trying to convince other DuPont shareholders to split the company in two. Peltz's argument: the conglomerate structure is hurting the stock and the high-growth unit should be split from the slower-growth cyclical business. DuPont responded by pointing to cost-cutting, buybacks and shareholder returns. Both sides are talking and the stock is climbing. Department store operator Kohl's said it is hiring more than 67,000 workers for the holiday selling season, about 34 percent more than what it recruited last year. In Europe, markets were mixed a day before the Scotland independence vote.