Stocks were cautiously in the red for most of the session, until the Federal Open Market Committee surprised many observers by announcing that it would leave its $85 billion-a-month bond-buying program intact. The major indexes jumped on the news, with the Dow and the S&P 500 Index hitting all-time highs. Gold, oil, and Treasury prices gained on the news, while the U.S. dollar index (DXY) fell 1%.
The Dow jumped 147 points, with 29 of its 30 components advancing; the S&P 500 Index rose 20; and the Nasdaq gained 37. Advancers led decliners by six to one on the NYSE and nine to five on the Nasdaq. The prices of Treasuries strengthened. Gold futures fell $1.80 to close at $1,307.60 an ounce; however, gold prices jumped 3% after close in the wake of the FOMC announcement. Crude oil’s most actively traded contract gained $2.46 to settle at $107.28 a barrel.
In Earnings News:
- Customer demand for cheaper shipping options helped push FedEx’s ground-shipping revenue 11% higher to a record high. Express-shipping revenue, however, fell 0.4%. FedEx reported that its fiscal first-quarter earnings rose 6.5% to $489 million, or $1.53 a share, on revenue of $11.02 billion, up 2.1%. The company’s shares (FDX) gained 5.03%.
- Adobe Systems Inc. missed estimates for its fiscal third-quarter earnings, but investors bid up the stock (ADBE) 9.22% after the company reported it now had more than one million subscriptions for its cloud-computing business. Profit was $83 million, or 16 cents a share (32 cents adjusted), down from $201 million, or 40 cents a share, in the year-ago period. Revenue fell from $1.08 billion to $995.1 million.
In Other Business News:
- Contrary to the expectations of many market observers, the Federal Open Market Committee decided after its two-day meeting to leave its $85 billion-a-month bond-buying program, also known as quantitative easing, intact. The FOMC said that economic conditions had improved but that it wanted more evidence that it could begin to withdraw stimulus without jeopardizing those improvements. In particular, the FOMC was concerned about the effects of rising mortgage rates and fiscal policy. In his press conference, Chairman Bernanke said fiscal policy headwinds this year would likely cost the U.S. economy “one percentage point of gross domestic product growth or more.” The FOMC also said it was concerned about the long-term effects of inflation running below its 2% objective. For more on the FOMC’s decisions, see the analysis today by Dr. Jacobsen, who has long been skeptical about claims that the Fed would begin to taper in September.
- Housing starts and building permits in August showed a sharp split between multi-family and single-family categories. Single-family housing starts jumped 7%, while multi-family starts dropped 11%. Overall, housing starts hit a seasonally adjusted annualized pace of 891,000, up 0.9% month over month and 19% year over year. Building permits overall dropped 3.8% for the month, weighed down by a drop in multi-family permits, but single-family permits rose 3%.
Twitter filed for its initial public offering last week, so there’s no way to escape it anymore. The hot new trend, according to New York Magazine, is for the “media elite” and celebrities to set up Twitter accounts for their newborn children. (Silicon Valley types have been doing this for years, of course.) Sadly, these newborns almost instantly get more followers than I have on my own Twitter account, and all they do is sit around and do nothing all day. (I have a feeling I just walked into a joke at my own expense.)
This trend could be easily dismissed except that it raises what’s becoming a crucial decision parents must make: what to name their child. Can parents any longer choose a common name that means that the Twitter, Facebook, Gmail, and LinkedIn addresses will all be taken already, effectively giving a future teenager something to complain about? Are there enough permutations in a limited alphabet to continue with new names that haven’t yet been taken?
As the John Smiths of the world know, the invention of social media has not been kind to people with common names. Is it JohnSmith691423 or JohnSmith55510 that someone is trying to find? And forget about Google. Even my own name, which is relatively common, runs into trouble with a Google search, returning far more mug shots than I’d like. (Before I walk into another joke at my expense, I’ll note that none of the mug shots are mine.) I now understand the trend toward unique spellings of common names, with vowels switched up or even a number or two added: Parents are trying to find an account name that no one’s taken on Twitter or Facebook yet and is easily discoverable on Google.
It didn’t used to matter all that much how common a name was, even in the same family, with Seniors and Juniors and IIIs. Now, the teenaged junior has even more to brood about because his dad probably took all the good screen names. To borrow from the movie Highlander, there can be only one.
I completely understand the desire to lock down a social media username (but good luck trying to keep up with all of the new services over the course of the kid’s childhood). I’m not so sure it’s wise for parents to post from those accounts, though. As with everything, there will be unintended consequences to setting up a baby’s Twitter account and tweeting on its behalf. There’s nothing like kids reaching high school age and having long, searchable histories of humiliating baby photos in easy reach of their new classmates. The only good news would be that all the nicknames that would be invented because of those photos would likely already be taken on Twitter.
I had a hard enough time naming my dogs (whom I’ve forbidden from having Twitter accounts), so I’ll put this question to the real experts: Recent parents, have you faced the burden of naming a child in the social media age, or is this all a lot of hoopla over nothing? Leave your thoughts in the comments area below.