Taper Talk Ping-Pongs Stock Market On Friday

Although there were some interesting reports for investors to digest on Friday, the conflicting views of FOMC members Charles Plosser and James Bullard – as to whether to start cutting back the Fed’s bond-buying program in September – steered the direction of the stock market through the session.

As lunch hour approached, the major stock indices began to swoon in reaction to remarks made by Philadelphia Federal Reserve President Charles Plosser. During a speech at the Fifth Annual Rocky Mountain Economic Summit in Jackson Hole, Plosser expressed his opinion that the Fed should start its widely-dreaded “tapering” in September. After St. Louis Federal Reserve President James Bullard voiced his opposition to a September taper, during an interview at the same event, the stock indices headed back northbound for a late-day rally. (This event should not be confused with the Tenth District Economic Symposium in Jackson Hole on August 22-24, which Ben Bernanke will not attend.)

The day’s economic reports, which were upstaged by the taper talk, included the preliminary Thompson Reuters / University of Michigan Consumer Sentiment Index for July, which dipped to 83.9 from the June reading of 84.1. Economists were expecting an increase to the range between 84.7 and 85. The taper talkers also stole the spotlight from the Labor Department’s Producer Price Index, which rose 0.8 percent in June, for its biggest monthly gain since September of 2012. Economists were expecting a 0.5 percent increase.

JPMorgan (JPM) beat analysts’ earnings estimates with its quarterly earnings per share of $1.60, compared with estimates of $1.44. Wells Fargo (WFC) also won at “beat the number” with EPS of 98 cents, compared with expectations of 93 cents. Webster Financial (WBS) met the EPS estimate of 48 cents but fell $700,000 short on the top line, reporting revenue of $147.1 million.

The Dow Jones Industrial Average (DIA) picked up 3 points to finish Friday’s trading session at 15,464 for a 0.02 percent advance. The S&P 500 (SPY) advanced 0.31 percent to a new record-high close at 1,680.19.

The Nasdaq 100 (QQQ) climbed 0.64 percent to finish at 3,079. The Russell 2000 (NYSEARCA:IWM) rose 0.32 percent to end the day at a new record-high closing level of 1,036.52.

In other major markets, oil (USO) jumped 1.49 percent to close at $37.56.

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