After Market: Fed's Low Interest Plans Boost Investors' Moods

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Back-to-back rising days on Wall Street eased worries after the big sell-off that began last week. Buyers Wednesday hit the accelerator after the release of minutes from the last Fed policy meeting reassured investors that interest rates will stay low for some time to come.

The Dow Jones industrial average (^DJI) rallied 181 points, the Nasdaq composite (^IXIC) jumped 71 and the Standard & Poor's 500 index (^GPSC) gained 20 points.

Facebook (FB) led the rally, jumping 7 percent on positive comments from several brokerage firms. However, Facebook shares are still down 14 percent over the past month. LinkedIn (LNKD) gained 4 percent. It also received a brokerage upgrade. Amazon (AMZN), Netflix (NFLX) and other Internet stocks also posted gains.

Biotechs also had a good day. Celgene rose 6½ percent. Biogen (BIIB), Regeneron (REGN), Isis (ISIS) and Alnylam (ALNY) all gained at least 5 percent. And Ultragenyx Pharmaceuticals (RARE) jumped 12 percent as Morgan Stanley gave the stock an "overweight" rating.

And the gun has sounded on the first-quarter earnings season. Alcoa (AA) rose nearly 4 percent as it beat expectations. That helped some other old-line industrials: US Steel (X) rose 2½ percent and Allegheny Technologies (ATI) gained 3½ percent. But WD-40 (WDFC) slid 6 percent as net fell from a year ago.

%VIRTUAL-article-sponsoredlinks%And automakers hit some potholes. Toyota (TM) fell more than 1 percent after recalling 6.4 million cars worldwide for airbag and seat rail problems. GM (GM) fell 2½ percent as Morgan Stanley lowered its rating on the stock to "underweight." Ford (F) went along for the downhill ride, losing 1½ percent.

Elsewhere, Intuitive Surgical (INTU) dropped 7 percent after warning that revenue will be weaker than expected. It's also taking a charge to settle legal claims.

But Comcast (CMCSA) rose 2 percent and Time Warner Cable (TWC) gained 1½ percent as executives from the two companies testified before a Senate committee about the consumer benefits of their planned merger.

Constant Contact (CTCT) jumped 29 percent. The online marketing firm raised its earnings outlook.

And La Quinta (LQ), the hotel chain, edged 3 percent above its IPO price of $17 a share. However, the stock was priced below Street expectations.

What to Watch Thursday:
  • Selected chain retailers release March sales comparisons.
  • The Labor Department issues two reports at 8:30 a.m. Eastern time: import and export prices for March, and weekly jobless claims.
  • Freddie Mac releases weekly mortgage rates at 10 a.m.
  • The Treasury Department releases its federal budget for March at 2 p.m.
These major companies are scheduled to release quarterly financial statements:
  • Family Dollar Stores (FDO)
  • Pier 1 Imports (PIR)
  • Rite Aid (RAD)
-Produced by Drew Trachtenberg.

7 Tax Tips for Investors
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After Market: Fed's Low Interest Plans Boost Investors' Moods
The 1099 forms you received from brokerages and other financial institutions might not be the last ones they send. It's common for them to issue corrected versions a little later. Consider getting your tax return ready to go, then waiting until close to April 15 before submitting it. That way, you can incorporate any last-minute changes and avoid having to file an amended return.
Pay attention to when you sell any holding, because the capital gains tax rates differ for long-term and short-term holdings. Short-term capital gains are taxed at your ordinary income tax rate, which could top 30 percent. Long-term gains (those held for more than a year) get preferential rates, which are zero percent for those in low-income brackets and 15 percent for most of us.
If you own underwater stocks, consider selling them for a loss. You can use those losses to offset gains from other sales, reducing your taxes owed. You can always buy back the asset later, if you still believe in it -- just be sure to wait for 31 days to pass, to observe the "wash sale rule."
If you're planning to sell one or more holdings that will give you a really big gain, submit an amended W-4 form to increase your withholding, or send the IRS an estimated tax payment. Underpaying your taxes significantly during the year can lead to a penalty at tax time. You may be protected by a "safe harbor" provision, though, which can save you from having to jump through those hoops.
If you're planning to buy shares of a mutual fund, determine when it will distribute its dividends. Many funds do so near the end of the year, and when that happens, the fund's share price will drop by the amount of the distribution -- which is taxable to shareholders. It's better to just wait until after that payout to buy in.
Mutual funds with high turnover ratios (reflecting a lot of buying and selling in a fund) have expenses for these trades. It's worth favoring funds with low turnover ratios, especially index funds and index-tracking ETFs, which simply hold onto the mix of securities in a given index, without a lot of trading activity. (Index funds generally outperform their higher-turnover counterparts, too.)
Boost the power of your Individual Retirement Accounts by making your annual contributions early in the year, giving the funds more time to grow. Over decades, it can make a significant difference.
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