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December 16 Market Close: GovCon Index, US Stocks Climb as Fed Pulls Trigger on Interest Rate Hike

GovConIndexUPThe GovCon Index held steady in positive territory over morning and midday activity then surged in the afternoon session to close at a gain of 1.21 percent to 76.944 on news that the Federal Reserve increased interest rates for the first time since June 2006.

Short-term interest rates will go up 0.25 percentage points from near-zero levels to fall in a range of 0.25-to-0.5 percent, and the central bank said any subsequent releases will be gradual.

All 10 members of the Federal Open Market Committee — the Fed’s policymaking body — voted in favor of an interest rate increase and said the central bank was confident in job growth numbers and continued steady economic expansion.

U.S. stocks surged in afternoon trading after Fed Chair Janet Yellen announced the rate hike and markets welcomed the news despite continued pressure on oil prices as crude futures in New York settled down 4.9 percent to $35.52 a barrel and brent crude in London fell 3.3 percent to $37.18 a barrel.

Honeywell International (NYSE: HON) led Index gainers at 5.7 percent to $104.08 after the industrial conglomerate, which makes aerospace and defense products, reaffirmed its outlook for 2015 and released 2016 guidance that met Wall Street analysts’ expectations for the new year.

The company expects 2015 earnings of $6.10 per share versus Wall Street’s $6.10 consensus forecast and revenue of $38.5 billion compared to the analyst community’s outlook of $38.6 billion.

For 2016, Honeywell’s outlook has earnings of between $6.45 and $6.70 versus the analyst estimate of $6.56 and higher revenue of 4-to-6 percent from 2015 to fall in a $39.9 billion-to-$40.9 range versus Wall Street’s $40.2 billion forecast.

Honeywell also led the Index in volume with 7.3 million shares traded versus the stock’s 10-day average of 3.5 million.

Shares in Honeywell have gained 2.5 percent from the year’s start and are up 11.1 percent over 12 months.

Top GovCon Index Gainers

Symbol Company $ Current Price Net Change % Change
HON Honeywell International 104.08 +5.61 +5.70%
TXT Textron 42.61 +1.24 +3.00%
EGL Engility Holdings 32.43 +0.82 +2.59%
HNT Health Net 65.43 +1.56 +2.44%
MCK McKesson Corp. 190.72 +3.57 +1.91%

Market Summary

Advancing Issues 26
Declining Issues 3
Unchanged Issues 1
Index Value Net Change % Change
GovCon Index 76.944 +0.920 +1.210%
S&P 500 2, 073.06 +29.65 +1.45%
Dow Jones Industrial Average 17, 749.09 +224.18 +1.28%
NASDAQ 5, 071.13 +75.78 +1.52%

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