Sharechat Logo

While you were sleeping No rush to taper, Fed says

Thursday 11th July 2013

Text too small?

Wall Street was mixed as minutes from the latest Federal Open Market Committee meeting showed policy makers were looking for further strength in the US labour market before easing the central bank's bond-buying program.

In late afternoon trading in New York, the Dow Jones Industrial Average fell 0.20 percent, while the Standard & Poor's 500 Index declined 0.09 percent to 1,650.80. The Nasdaq Composite Index rose 0.31 percent. The S&P 500 today has swung between 1,647.66 and 1,657.92.

"While recognising the improvement in a number of indicators of economic activity and labour market conditions since the fall, many members indicated that further improvement in the outlook for the labour market would be required before it would be appropriate to slow the pace of asset purchases," according to the minutes of the FOMC's June 18-19 meeting released today.

The meeting took place before the release of the latest monthly government jobs data, released last Friday, showed companies added more jobs than economists had expected in June.

"The market's pretty convinced that the Fed's not going to do anything to dramatically change the liquidity that they're pumping into the system, and the minutes support that," Scott Wren, the St. Louis, Missouri-based senior equity strategist at Wells Fargo Advisors, told Bloomberg News.

Investors will closely watch Fed Chairman Ben Bernanke who is set to speak later today in Boston.

Bond investors had a more sombre take on the FOMC minutes, pushing yields on the 10-year US Treasury five basis points higher to 2.68 percent. The US dollar shed 1.1 percent against the euro.

US wholesale inventories dropped 0.5 percent in May because of stronger sales, according to Commerce Department data released earlier in the day. Economist polls by Reuters and Bloomberg News had predicted an increase.

"With the drawdown in inventories, if the pace of sales is maintained, we'll see a pickup in production," Millan Mulraine, director of US rates research at TD Securities in New York, told Bloomberg News. The sales figures show "we're ending the second quarter on fairly strong footing."

Hewlett-Packard increased 2.6 percent to US$26.12. Citigroup upgraded its recommendation for the computer maker to buy from sell and doubled its price estimate for the shares to US$32.

In Europe, the benchmark Stoxx 600 Index ended the day with a 0.1 percent gain from the previous close. Elsewhere, France's CAC 40, the UK's FTSE 100 index and Germany's DAX all ended 0.1 percent weaker.

NOTE: please be advised to read full articles from Business Desk Website, you will have to pay a subscription fee on their website.

  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 holds gains on improved dairy, bank capital outlook
MARKET CLOSE: NZ shares gain; banks rally on Reserve Bank capital decision
NZ dollar rises; bank capital rules less harsh than expected
RBNZ relaxes capital requirements, allows preference shares, extends phase-in
NZ dollar extends gain amid mixed US data, possible trade progress
MARKET CLOSE: NZ shares dip on eve of major regulatory decisions
NZ dollar sees off global headwinds, holds above 65 US cents
NZ dollar holds above 65 US cents; dairy auction prices mixed
Dairy index falls on weaker butter, milk fat demand
MARKET CLOSE: NZ shares join global decline; US tariff move weighs on exporters

IRG See IRG research reports