Sept. 16 - Summary: The Dow and S&P 500 are back near record highs as investors bet the next head of the Federal Reserve will not dramatically alter current policy; JPMorgan Chase is close to a $700 million settlement over the London Whale trading scandal -source; Apple sinks on China sales worries. Conway G. Gittens reports.
Wall Street is once again making its way toward lifetime highs with investors betting the next leader of the Federal Reserve will be slow to unwind the central bank's stimulative policies. With a rise to 15,494, blue chips are now only one percent below their old record high, and the S&P 500 is even closer. The Nasdaq finished the day lower. Why the Fed optimism? The sun has set on former Treasury Secretary Larry Summers bid to become the next Fed Chairman. He withdrew his name over the weekend. Summers was largely seen as someone who would likely quickly unwind the policies used by the Fed to boost the economy after the financial crisis. The market now thinks Vice Chair Janet Yellen is more likely to get the job and keep a steady hand. By the way, the Fed is expected to trim its $85 billion bond buying program this week. JPMorgan Chase is close to a $700 million settlement for the London Whale trading fiasco, according to a source. The trading scandal resulted in more than $6 billion in losses and tainted the reputation of the bank. There's renewed worries about potential Apple sales in China. China Telecom is making customers pay more of the bill for the iPhone 5S than it did for the iPhone 5, according to the Wall Street Journal. This is of particular concern given Apple's lost market share to cheaper Android-power smartphones. At the same time the so-called lower cost 5C aimed at Chinese customers is being criticized for a high price tag. Shares of Apple fell more than 3 percent, dragging the Nasdaq down as well. Google is buying sharing app Bump for an undisclosed price. The app allows users to share videos, photos, and other kinds of data with a simple bump of two web-enabled devices via servers in the cloud. The app is used on iOS and Android devices. According to a blog, Bump will operate as it has until further notice. Chrysler is close to filing for an initial public offering this week, according to a report in the Financial Times. But the two main stakeholders: Italy's Fiat and an affiliate of the United Auto Workers are still fighting over how much Chrysler is worth. Fiat wants to buy out its partner before an IPO. Finally, stock trading in Europe hit a five-year high as investor appetite for risk heats-up as tensions with Syria cool down.