Magazine article American Banker

Stocks Mixed on Hints of Rate Hike, Inflation

Magazine article American Banker

Stocks Mixed on Hints of Rate Hike, Inflation

Article excerpt

Bank technology stocks ended mixed for the week, as investors reacted to economic data that indicated rising inflation and an interest rate hike.

According to the Commerce Department, durable goods orders were up 1.6% for July, better than the expected 0.3% rise. Orders for electronic and electrical equipment jumped 4.7%, while industrial machinery orders - which include computers - rose 2.1%.

The latest figures reinforced opinions that the Fed will raise rates before the end of the year. Last week, the central bank held the overnight federal funds rate at 5.25%.

The news "might help revenue growth" among some technology companies, "but what you have to worry about is that if inflation goes up, then it hurts growth stocks from an investment standpoint," said Gregory M. Gould, an analyst at Goldman, Sachs & Co., New York.

The Dow Jones industrial average dropped 10.73 points on the news, but still managed to finish up 33.29 points for the week. The Nasdaq composite also closed up 9.4 points for the week, while Goldman Sachs' composite index of U.S.-traded technology companies rose 1.32 points.

Checkfree Corp. of Columbus, Ohio, said it lost over $41 million - $1.02 per share for the quarter ending June 30 - compared to net income of $228,000, or a penny per share in the year- earlier period.

The company's losses were attributed in part to a $28.6 million charge related to the recent acquisition of Security APL, which sells portfolio management software and services to banks. …

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