Permanent Value

Stocks Rise as Federal Reserve Raises Discount Rate

Michael La Salle
February 19th, 2010

Stocks were higher for the second straight week as the Dow Jones Industrial Average gained 3.0% and the S&P 500 gained 3.1%. This gain came despite the Federal Reserve announcing on Thursday that is will be raising the discount rate, the interest rate the Federal Reserve Bank charges commercial banks that borrow short term funds from it, to 0.75% from 0.50%. In earnings news, Chesapeake Energy, Hewlett-Packard, and Wal-Mart all reported better-than-expected earnings this week. Priceline.com Incorporated also surprised this week as the global online travel company posted fourth-quarter earnings of $1.99 per share beating analysts’ expectations of $1.68 per share. Priceline.com Incorporated also forecast first-quarter earnings to be between $1.54 and $1.64 per share, coming in higher than analysts’ estimates of $1.40 per share. Shares of Priceline.com Incorporated rose to 10-year highs on the positive news.