While you were sleeping: Wall St rebounds

Tuesday 15th August 2017

Wall Street climbed as investors found value in some stocks following last week’s declines.

Wall Street's fear gauge—the CBOE Volatility Index or the VIX—dropped 20.3 percent to 12.36 as concern that tensions between the US and North Korea will lead to war eased.

"There's still cash on the sidelines looking for an opportunity to buy the dip," Bucky Hellwig, senior vice president at BB&T Wealth Management in Birmingham, Alabama, told Reuters. "And they're in there with both hands today."

In 3.18pm trading in New York, the Dow Jones Industrial Average rose 0.6 percent, while the Nasdaq Composite Index rallied 1.3 percent. In 3.04pm trading, the Standard & Poor’s 500 Index climbed 0.9 percent.

US Treasuries fell, pushing yields on the benchmark 10-year note three basis points higher to 2.22 percent.

The Dow moved higher as gains in shares of Visa and those of Goldman Sachs, recently up 1.7 percent and 1.6 percent respectively, outweighed declines in shares of Chevron and those of Home Depot, recently down 0.7 percent and 0.6 percent respectively.

Merck Chief Executive Kenneth Frazier resigned from US President Donald Trump's American Manufacturing Council, saying “I feel a responsibility to take a stand against intolerance and extremism.”

Frazier's resignation came as Trump’s muted response to a deadly clash between white supremacists and protesters in Charlottesville over the weekend drew widespread criticism.

Shares of Merck traded 0.4 percent stronger as of 3.39pm in New York.

“Now that Ken Frazier of Merck Pharma has resigned from President's Manufacturing Council, he will have more time to LOWER RIPOFF DRUG PRICES!” Trump said via Twitter.

Shares of Alibaba gained, up 1.9 percent as of 3.36pm in New York, after Dan Loeb's Third Point bought 4.5 million shares in the Chinese internet giant.

Federal Reserve Bank of New York President William Dudley said he still expects one more interest rate increase this year.

"I think it depends on how the economic forecast evolves," Dudley said in an interview with the Associated Press. "If it evolves in line with my expectations, I would expect—I would be in favour of doing another rate hike later this year.

Minutes from the Fed’s July meeting are scheduled for release on Wednesday and will be closely watched for fresh hints about the outlook for inflation and the likelihood that the central bank will start unwinding its balance sheet at its September gathering.

In Europe, the Stoxx 600 Index finished the day with an advance for the first time in four days. The UK’s FTSE 100 Index added 0.6 percent, France’s CAC 40 Index increased 1.2 percent, while Germany’s DAX Index advanced 1.3 percent.

(BusinessDesk)

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