Stocks in the United States fluctuated initially but eventually closed today’s trading with gains. Falling US government bond yields supported growth stocks of large companies. Investors are now waiting for further comments from US Federal Reserve (Fed) officials to gauge the direction of interest rates. In the foreign exchange market, the dollar strengthened.
Technology led the way
The Dow Jones index, which includes shares of thirty leading US companies, gained 0.17 per cent today to end trading at 34,152.60 points. The broader S&P 500 index rose 0.28 per cent to 4,378.38 points and the Nasdaq Composite index, which includes many companies in the high-tech sector, was up 0.90 per cent to 13,639.86 points. The S&P and Nasdaq posted their longest streak of gains in two years.
Yields on 10-year Treasuries posted their fifth decline in the past six sessions on expectations that the Fed has ended its rate-hike cycle. Several central bank officials made their views on interest rate developments public. Minneapolis Fed chief Neel Kashkari dampened hopes for an early rate cut, saying the central bank may have to do more to bring inflation back down to its 2 percent inflation target. Chicago Fed chief Austan Goolsbee acknowledged the downward trend in inflation, but said price pressures are not over yet.
Rate concerns
Large-market-cap growth stocks such as Microsoft, Apple and Amazon rose 1.1 percent, 1.45 percent and 2.1 percent, respectively. “Initially, higher rates raised concerns about growth in these stocks, (but) we now believe they may be a defensive spot in this market. They have relatively bulletproof balance sheets,” said analyst Rick Meckler of Cherry Lane Investments.
Energy titles, on the other hand, headed lower. They were weakened by the drop in oil prices, which was caused by, among other things, mixed data on the Chinese economy.
source: ÄŒTK
