Sharechat Logo

While you were sleeping: US consumer gains confidence

Wednesday 29th October 2014

Text too small?

Stocks on both sides of the Atlantic advanced amid better-than-expected corporate earnings and US consumer confidence climbing to the highest level in seven years. 

Focus is also squarely on US Federal Reserve policy makers as they started their two-day meeting. The central bank is expected to end its monthly bond-buying program.

Shares of Amgen jumped, last up 5.1 percent, after the company reported third-quarter earnings that surpassed expectations and upgraded its full-year forecast. 

In afternoon trading in New York, the Dow Jones Industrial Average added 0.57 percent, the Standard & Poor’s 500 Index rose 0.63 percent, while the Nasdaq Composite Index climbed 1.26 percent. 

Gains in shares of Caterpillar and those of United Technologies, up 2.1 percent and 1.4 percent respectively, led the Dow higher. Shares of Merck extended Monday’s slide, last 2.5 percent lower for the largest percentage drop in the Dow in afternoon trading.

"Corporate earnings continue to surprise and that has been the wind in the sails of this rebound," King Lip, chief investment officer at Baker Avenue Asset Management in San Francisco, told Reuters.

Also helping was a Conference Board report showing its gauge of US consumer confidence posted its highest reading since October 2007, rising to 94.5 this month.

To be sure, two separate reports were disappointing. Durable goods orders unexpectedly fell, sliding 1.3 percent in September. The S&P/Case-Shiller index of property values increased 5.6 percent in August from a year earlier, down from 6.7 percent in the year ended July. It was the slowest increase since November 2012.

Meanwhile, the US Treasury’s auction of US$29 billion of two-year notes drew a yield of 0.425 percent, the lowest since May, amid expectations the Fed will keep its target interest rate at record lows.

“Lower for longer is the outlook for now,” Larry Milstein, managing director in New York of government-debt trading at RW Pressprich & Co, told Bloomberg News. “That’s why the two-year note is trading below 0.5 percent.”

In Europe, the Stoxx 600 ended the session with a 1 percent increase rom the previous close. France’s CAC 40 rose 0.4 percent, the UK’s FTSE 100 Index gained 0.6 percent, while Germany’s DAX rallied 1.9 percent.

Shares of UBS jumped 5.8 percent after investors welcomed the Swiss bank’s announcement it put aside 1.84 billion Swiss francs (US$1.94 billion) for litigation provisions.

“I think we have seen the peak in litigation costs,” Peter Stenz, a Zurich-based fund manager at Swisscanto Asset Management, told Bloomberg News. “At some point we’ll see light at the end of the tunnel.”


  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:

PCT - Delivering on strategy underpins strong operating result
KFL - August 2020 monthly update
BRM - August 2020 monthly update
MLN - August 2020 monthly update
Further COVID-19 Restrictions at SkyCity’s New Zealand Properties
FY20 results guidance met, Results date, Banking Facility
Sky sells OSB assets to NEP NZ, secures 10 year partnership
NZX fully operational - announcement re COVID-19
Heartland Market Update
Steel & Tube Fy20 Trading Update

IRG See IRG research reports