Sharechat Logo

While you were sleeping Dow advances to record

Thursday 7th November 2013

Text too small?

The Dow Jones Industrial Average rose to a record as investors bet that the latest economic and jobs reports will confirm weak growth and prompt the US Federal Reserve to maintain its monetary stimulus into the new year.

In afternoon trading in New York, the Dow Jones Industrial Average climbed 0.62 percent, while the Standard & Poor's 500 Index gained 0.27 percent. The Nasdaq Composite Index fell 0.2 percent.

Earlier in the day the Dow rose as high as a record 15,732.88. Gains in shares of Microsoft, last up 3.7 percent, and those of Chevron, last up 2 percent, paced the Dow's advance.

In a sign of confidence in the overall outlook, companies are taking advantage of investors' willingness to take risk. According to Thomson Reuters data, if all 13 scheduled initial public offerings-including Twitter-price this week, it will be the busiest week of the year in terms of number of primary issues, as well as the most brisk week since September 2007.

"We're over the period where the market is lifting all boats," Michael Binger, senior portfolio manager for Gradient Investments in Arden Hills, Minnesota, told Bloomberg News. "The economy is growing at a mediocre rate. Tapering news is put on hold.

The latest American corporate earnings have proven decent including those of Ralph Lauren, pushing its shares up 4.5 percent. However, there have been disappointments too including Tesla Motors today, sending its stock down 15.7 percent.

While today's data was better than expected, with the Conference Board's index of US leading indicators rose 0.7 percent in September, this week's GDP and payrolls releases are expected to dampen enthusiasm about the world's biggest economy.

In Europe, the Stoxx 600 Index rose 0.4 percent, closing at its highest level since May 2008.

Germany's DAX added 0.4 percent, while France's CAC 40 gained 0.8 percent. The UK's FTSE 100 fell 0.1 percent.

The euro strengthened against the greenback, ahead of tomorrow's meeting of European Central Bank policy makers, after a Market News International report, citing senior Eurosystem officials, said that the ECB will keep interest rates at their current level.

Meanwhile, the latest economic data from the euro zone were a mixed bag. Germany's factory orders increased a better-than-expected 3.3 percent in September, a report showed today.

However, retail sales in the euro zone rose a lower-than-expected 0.3 percent in September from last year.

Separately, Markit Economics' gauge of services industries in the euro zone last month declined at a pace that was less than initially estimated.

"The euro area economic recovery lost less momentum than first estimated in October," Chris Williamson, chief economist at Markit, said in a statement. "The final reading of the October Eurozone PMI came in above the flash estimate, but still fell compared with September to signal an easing in the already-modest pace of expansion."

  General Finance Advertising    

Comments from our readers

No comments yet

Add your comment:
Your name:
Your email:
Not displayed to the public
Comments to Sharechat go through an approval process. Comments which are defamatory, abusive or in some way deemed inappropriate will not be approved. It is allowable to use some form of non-de-plume for your name, however we recommend real email addresses are used. Comments from free email addresses such as Gmail, Yahoo, Hotmail, etc may not be approved.

Related News:

NZ dollar rises as US-China trade, Brexit tensions ease
SkyCity shares hit 7-week low as fire encapsulates convention centre
Wrightson showcases Fruitfed Supplies as horticulture stands out
Fonterra rivals fear dairy giant will get leg up from law overhaul
Wellington Drive remains in the black as it raises operating forecast
OMV plans further maintenance at Pohokura
Sky continues sports drive with extension to netball rights
Apple's asset-shuffling puts $270m value on PowerbyProxi
Fonterra lifts payout forecast on improving global dairy prices
22nd October 2019 Morning Report

IRG See IRG research reports