Sharechat Logo

While you were sleeping Bullard lifts stocks

Wednesday 22nd May 2013

Text too small?

Wall Street gained, touching records, after Federal Reserve Bank of St. Louis President James Bullard said the central bank should maintain its current bond-buying program to help bolster growth.

In a speech in Frankfurt, Germany, Bullard recommended the Fed "continue with the present quantitative easing program, adjusting the rate of purchases appropriately in view of incoming data on both real economic performance and inflation."

"QE is closest to standard monetary policy, involves clear action, and has been effective," Bullard said.

He made his comments a day before Fed Chairman Ben Bernanke is scheduled to give testimony to Congress, while minutes from the latest Fed's policy committee meeting will also be released tomorrow.

In late afternoon trading in New York, the Dow Jones Industrial Average rose 0.47 percent, the Standard & Poor's 500 Index added 0.37 percent, while the Nasdaq Composite Index gained 0.25 percent.

Earlier in the session, the Dow rose to a record 15,434.50 and the S&P 500 climbed to a high of 1,674.93.

Goldman Sachs Group is forecasting that the US stock-market rally may last at least another 2 1/2 years, sending the S&P 500 up 26 percent to 2,100, according to a Bloomberg report. It expects the index to end 2013 at 1,750 and to rise to 1,900 by the end of 2014.

Sharesholders in JPMorgan rejected an attempt to split the roles of chairman and chief executive, a decision that should keep Jamie Dimon at the helm of the bank. Dimon had inferred ahead of today's vote that he might leave if he lost one of his two roles.

When push came to shove, "people were worried Dimon was going to walk," Leon Kamhi, executive director of Hermes equity ownership services-one of the sponsors of the split chair proposal, told Reuters.

US Treasuries also gained, pushing yields on the 10-year bond three basis points lower to 1.94 percent. The greenback, however, shed 0.3 percent to US$1.2915 per euro.

"I don't see any real change in the QE intentions tomorrow," Thomas di Galoma, senior vice president of fixed-income rates trading at ED&F Man Capital Markets in New York, told Bloomberg News. "There's no reason for bonds to sell off dramatically."

Europe enjoyed a boost from Bullard's comments too. The region's benchmark Stoxx 600 Index ended the day with a gain of almost 0.1 percent, recovering from earlier losses. Germany's DAX rose 0.2 percent, while France's CAC 40 increased 0.3 percent and the UK's FTSE 100 gained 0.7 percent.

At the same time, the Bundesbank said in its monthly report that "economic activity is expected to improve markedly in the second quarter."

There was more good news from corporate America.

Shares of Home Depot gained, last up 3 percent, as the home improvement chain lifted its earnings outlook, another indication that the US real estate market continues to gather steam.

BusinessDesk.co.nz

  General Finance Advertising    

Comments from our readers

No comments yet

Add your comment:
Your name:
Your email:
Not displayed to the public
Comment:
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:

Greater role for gas in electrification of transport, industry
Chorus sees growth in high value gigabit fibre plans
Arvida gets 87% uptake in $92 mln rights offer
NZ dollar weakens after US retail sales boost greenback
17th July 2019 Morning Report
Dairy product prices gain for first time in five auctions
MARKET CLOSE: NZ shares fall in listless trading; power companies gain
Gold Report 16th July 2019
NZ dollar rises after CPI meets expectations; US dollar weakens
Yili's Westland takeover gets OIO approval

IRG See IRG research reports