Stocks rallied on Tuesday after reassuring words from the Federal Reserve’s March 22 meeting eased worries about aggressive interest-rate hikes, while crude oil fell below $52 a barrel.
The Dow Jones Industrial Average rose 59.41, or 0.6 percent, to close at 10,507.97. The Standard & Poor’s 500 Index rose 6.55, or 0.6 percent, at 1,187.76. The Nasdaq Composite Index rose 13.28, or 0.7 percent, to 2,005.40.
Minutes from the Federal Open Market Committee meeting showed it planned to stick with “measured” interest rate hikes, at least in the short term. The Fed raised the benchmark overnight lending rate by a quarter percentage point at that meeting to 2.75 percent, the seventh such increase since last summer. Policy makers noted that the nation’s productivity remained strong and would help keep inflation in check, something Wall Street had been hoping to hear.
Oil prices dropped for the sixth time in the past seven sessions after the International Energy Agency forecast slower growth in demand. U.S. light crude futures for May delivery slid $1.85 to settle at $51.86.
Among local movers, shares of Mossimo Inc. gained 24.7 percent to close at $4.14 after the Santa Monica-based clothing maker’s founder and majority shareholder, Mossimo Giannulli, made an offer to buy up the company’s outstanding shares and take Mossimo private. Giannulli owns 10.3 million shares, or 65.3 percent of the company. His $4-a-share bid valued the remaining 5.5 million shares at a 20 percent premium above Monday’s closing price of $3.32.
The shares’ rise above the $4 offer price indicates expectations among investors that the company will fetch a higher price than its founder is offering. The news elicited a shareholder lawsuit seeking to block the transaction because the price was too low.
And Jacobs Engineering Group Inc. rose 2.2 percent to $54.50 after the Pasadena-based engineering firm announced that a subsidiary company received a contract from the Florida Department of Transportation’s Turnpike Enterprise to perform construction engineering and inspection for Florida’s turnpike in Orange County. Officials did not disclose the contract value.
On the down side, Big 5 Sporting Goods Corp. lost 0.4 percent to close at $25.02 on the same day the El Segundo-based sporting goods retailer’s stock was rated “buy” in new coverage by Brean Murray Securities Inc.
