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While you were sleeping: Amazon, tech stocks lift Wall St

Thursday 22nd February 2018

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Wall Street climbed, bolstered by gains in shares of Amazon and other tech shares, as investors eyed the latest clues on the pace of Federal Reserve interest rate increases. 

In 1.06pm trading in New York, the Dow Jones Industrial Average climbed 0.6 percent, while the Nasdaq Composite Index rallied 0.9 percent. In 12.52pm trading, the Standard & Poor’s 500 Index gained 0.6 percent. 

Wall Street gained, as did the US dollar, ahead of Wednesday’s release of the minutes from the Federal Reserve’s January meeting, the final one chaired by Janet Yellen. 

“What we’re going to see in these minutes is the mindset of the Fed before everything changed,” Jonathan Lewis, chief investment officer at Fiera Capital, told Bloomberg before the release of the minutes. 

“To the extent that they hint at any concern that’s greater than in the past about wages and inflation, that would be a source of concern to the markets. That might lead people to think that they’ll be hawkish and will hike at a faster rate,” Lewis noted. 

So far the Fed has flagged three interest rate increases this year, with investors betting the first one will be announced following the March meeting. 

“Right now Fed fund futures are pricing in three rate hikes with just under a 50-50 short of a fourth,” Matt Miskin, market strategist at John Hancock Investments, told Reuters before the minutes were released.

“The Fed minutes and the lead up to the March meeting could push that fourth rate hike into play as we find more about inflationary data and how the Fed is looking into that,” Miskin said.

The Dow moved higher as gains in shares of United Technologies and those of JPMorgan Chase, recently up 3 percent and 1.7 percent respectively, outweighed slides in shares of Walmart and those of General Electric, down 2.3 percent and 1.5 percent respectively. 

In Europe, the Stoxx 600 Index ended the day with a 0.2 percent gain from the previous close. France’s CAC40 Index also added 0.2 percent.

The UK’s FTSE 100 index rose 0.5 percent, led by a 5.2 percent rally in Glencore shares. 

Shares of Glencore climbed after the mining and commodities trading company reported results it called its "strongest on record" and boosted its dividend payout to investors to US$2.9 billion as it benefitted from higher commodity prices and cost cuts. 

“Our performance in 2017 was our strongest on record, driven by our leading marketing and industrial asset businesses," Chief Executive Officer Ivan Glasenberg said in a statement. "The benefit of higher commodity prices combined with a continued strong unit cost performance is reflected in enhanced mining margins within our metals and energy operations.”

Glencore boosted its shareholder dividend payout to US$2.9 billion. 

The company also said it was eyeing deals.

"We’re generating US$10 billion of free cash flow on current commodity prices,” said Glasenberg, Bloomberg reported. “There is room if and when we want to do any acquisitions."

Germany’s DAX Index fell 0.1 percent.


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