Sharechat Logo

While you were sleeping Wall Street climbs to record

Friday 19th July 2013

Text too small?

Wall Street rose to a record after better-than-expected economic data and corporate earnings fuelled investors' optimism the US economy is gathering steam as Federal Reserve Chairman Ben Bernanke reiterated the central bank's ongoing support for growth.

Bernanke testified before Congress for a second day, now to the Senate Banking Committee. He has finally managed to reassure investors that the Fed's stimulus will not vanish, saying there is no "preset course" for its US$85 billion a month bond-buying program.

"The market gets the idea the tapering is coming, the economy is improving and rates are still going to be low for a time," Rick Fier, director of equity trading at Conifer Securities in New York, told Bloomberg News.

Meanwhile, the latest economic reports surpassed forecasts. Initial claims for state unemployment benefits fell by 24,000 to a seasonally adjusted 334,000 last week, according to the Labor Department. That was a larger drop than economists had anticipated.

Separately, the Philadelphia Federal Reserve Bank's index of business activity index rose to 19.8 last month from 12.5 in June, comfortably beating economists' expectations.

The latest US earnings also showed strength. Shares of Morgan Stanley gained, last up 4.8 percent, on better-than-expected earnings and plans to buy back US$500 million in stock.

"Morgan Stanley has been a turnaround story and I think this buyback is an indication that they're at the next phase of their development," Kenneth Leon, analyst with S&P Capital IQ, told Reuters.

Shares of International Business Machines Corp also rose, last up 2 percent, as the company lifted its full-year earnings forecast. UnitedHealth also beat earnings expectations, boosting its shares 6.8 percent.

In late afternoon trading in New York, the Dow Jones Industrial Average rose 0.56 percent, the Standard & Poor's 500 Index advanced 0.53 percent, while the Nasdaq Composite Index gained 0.11 percent. The S&P 500 earlier touched a record 1,693.12, while the Dow reached a record 15,589.40.

"The initial jobless claims were better than expected. Earnings are coming in OK. All in all it's hard not to be bullish on the market here," Fier said.

Shares of Dell rose 1.9 percent. The company postponed a shareholder vote on its chief executive's US$24.4 billion buyout offer to Wednesday after failing to get enough support, according to Reuters.

"The delayed vote may speak to the Silver Lake/Dell transaction not finding necessary support," Topeka Capital Markets analyst Brian White told Reuters. "A higher bid may be necessary to consummate this transaction."

In Europe, the benchmark Stoxx 600 Index gained 0.9 percent. The UK's FTSE 100 Index and Germany's DAX both rose 1 percent, while France's CAC 40 added 1.4 percent.

  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:

Further Contract Win Strengthens Scott Technology’s Position In Mining Sector
China’s Assertiveness Is Becoming a Problem for Its Friends, Too
New Talisman - Chairman’s Address to AGM 2020 August 6, 2020
T&G reports its 2020 Interim Results
Gold price hits $2,000 for first time on Covid
TruScreen strengthens its market presence in central and eastern Europe
Refining NZ announces non-cash impairment
Ryman Healthcare COVID-19 update Victoria
Talisman Quarterly Activities Report to 30 June 2020
General Capital gives notice of Annual Meeting

IRG See IRG research reports