All the king’s horses, and all the king’s men, couldn’t instill confidence in the S&P 500 (INDEXSP:.INX) again — at least for today, that is!
As has been the case over the past couple of weeks, concerns about what the Federal Reserve’s next move will be with regard to its $85 billion in monthly bond purchases has investors worried. These bonds have helped keep interest rates low and have helped to stabilize the mortgage-backed-securities market, which is partially responsible for giving the housing sector new life. When this bond-buying program tapers off, fears exist that lending rates will rise and that housing-sector growth will stall.
It also didn’t help that the Fed’s release of its Beige Book midday pointed to inconclusive next moves. The U.S. economy grew at a modest pace since mid-April, which would lend credence to the notion that the recovery is still on track. However, hiring was more tempered than expected, meaning further stimulus may be warranted.
All in all, a confusing day of speculation and economic data clustered together to create a fantastic session — if you’re a bear! The S&P 500 (INDEXSP:.INX) fell by 22.48 points (-1.38%) to finish at 1,608.90 and is now off nearly 4% from its all-time record close set a little more than two weeks ago. In spite of today’s carnage, three companies still managed to step up to the plate and head higher.
Leading the charge higher, up 6.6%, was network equipment provider Juniper Networks, Inc. (NYSE:JNPR) whose CEO, Kevin Johnson, commented that he expects a rising trend of capital expenditures for service providers at a conference hosted by Bank of America Corp (NYSE:BAC). Don’t say I didn’t tell you this, because the signs have been evident for a while that networking equipment, fiber, switching, adapter providers, et al., were poised to benefit from AT&T Inc. (NYSE:T), Sprint Nextel Corporation (NYSE:S) and T MOBILE US INC (NYSE:TMUS) as they play catch-up to Verizon Communications Inc. (NYSE:VZ)‘s 4G LTE network. Increased capital spending for these companies takes time to work its way down the chain, but it’s about to create the next in a series of infrastructure booms, of which Juniper Networks, Inc. (NYSE:JNPR) looks ripe to reap the rewards.
Discount retailer Dollar General Corp. (NYSE:DG) rebounded 3.2% after having a miserable Tuesday, which saw the company lower the top end of its full-year EPS forecast from a range of $3.15-$3.30 to a range of $3.15-$3.22 on revenue growth of 10%-11% (from a previous forecast of 10%-12%).