Interest Rate Question Looms Over Stocks

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Stocks finished narrowly mixed Tuesday after Federal Open Market Committee minutes gave no sign when the central bank would ease its campaign of interest-rate hikes.


The Dow Jones Industrial Average fell 19.88, or 0.2 percent, to close at 10,503.68. The Standard & Poor’s 500 Index was up 0.21, or 0.02 percent, at 1,194.07. The Nasdaq Composite Index gained 4.97, or 0.2 percent, to 2,061.62.


The minutes of the Fed’s May meeting noted a risk of inflation as well as an economic slowdown, but said that those pressures remained in check and that interest rates could be increased slowly. The Fed has raised interest rates eight times since last June, with each hike consisting of 25 basis points, or a quarter-percentage point.


Among local movers, shares of Flamemaster Corp. jumped 26.3 percent to $6 after the Sun Valley-based coatings and sealants manufacturer reported first-quarter net income of $196,262 (17 cents per diluted share) on sales of $1.3 million, compared with income of $123,745 (10 cents) on sales of $1.2 million in the year-ago period.


Hilton Hotels Corp. rose 1.3 percent to $23.60 after the Beverly Hills-based hotelier’s stock was raised to “buy” from “neutral” by analyst Smedes Rose at Calyon Securities (USA) Inc. The 12-month price target was set at $27 per share.


And VCA Antech Inc. gained 2.3 percent to $24.95 after the L.A.-based operator of animal hospitals announced late Monday that it had agreed to buy rival Pet’s Choice Inc. for $60 million in cash to expand its business in five states.


On the down side, PC Mall Inc. lost 1.4 percent to close at $4.19 after the stock of the Torrance-based direct marketer of computer products was downgraded to “strong sell” from “sell” by analyst Ivan Feinseth at Matrix USA.


And Kilroy Realty Corp. fell 0.9 percent to $46.06 after the L.A.-based real estate investment trust’s stock was cut to “neutral” from “buy” by analyst Steve Sakwa at Merrill Lynch.

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