Dow plunges 367 points

23 Dec 2015 | Author: | No comments yet »

First take: It’s about time, Fed!.

Shares of Red Hat Inc. gained in Thursday’s extended session after the open-source software provider posted results that beat analysts’ expectations. Red Hat reported fiscal third-quarter earnings edged down to $46.9 million, or 25 cents a share, from $47.9 million, or 26 cents a share, a year earlier. Yellen indicated that the U.S. economy is on track for an interest rate hike this month, but the Fed will need to review incoming data before making a final decision. (AP Photo/Susan Walsh) ORG XMIT: DCSW104(Photo: AP) The nation’s central bank Wednesday hiked short-term interest rates for the first time in nearly 10 years, finally signaling the days of free money are over.

Red Hat projected earnings per share of 26 cents and 47 cents after adjustments in the fourth quarter while revenue is expected in a range of $535 million to $539 million. The Dow Jones industrial average rallied 224 points to 17,749 following the announcement and all 10 of the major market sectors gained. “Like unwrapping the holiday gift that had been repeatedly requested, the markets breathed a sigh of relief when the Fed raised the fed funds rate,” says Sam Stovall of S&P Capital IQ. Over the next year years, adjustable mortgage rates will go from 3% to 5% and credit card rates rise from 15% to 17%, McBride says. “This is where the effect on household budgets becomes more pronounced,” he says. The end of the year is always a good time to do a review and make sure you’re on track and incorporate any changes to your goals into your overall plan.

I think the rate is not going to be significant for the housing market unless rates start going up substantially, which our CIO does not expect in the short term. It may actually provide an impetus for people to make a purchase that they’ve been contemplating for some time and move ahead with now that [rates are going up]. To receive business news directly in your inbox each Tuesday and Thursday, sign up for our free e-newsletter, Briefcase, and be sure to join the conversation by commenting below.

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