While you were sleeping: IMF, Apple lift stocks
Dec 24 (BusinessDesk) – Wall Street rose, pushing the Dow Jones Industrial Average and the Standard & Poor’s 500 Index to fresh record highs, as the International Monetary Fund said it plans to lift its outlook for the US economy.
"Growth is picking up and unemployment is going down,'' IMF Managing Director Christine Lagarde said yesterday on NBC's ‘Meet the Press.’ "So all of that gives us a much stronger outlook for 2014, which brings us to raising our forecast.''
Lagarde did not provide details of the new estimate. In October, the IMF forecast the US economy would grow 2.6 percent in 2014.
She praised the Fed for the way it flagged its plans to begin easing the pace of its monthly bond-buying. Policy makers last week said they will cut back the central bank’s bond purchases to US$75 billion a month from US$85 billion next month.
“We see the Fed having taken some very well communicated action concerning the tapering of the program, and those are good signs, in addition to which we see some good numbers,” Lagarde said.
In afternoon trading in New York today, the Dow gained 0.55 percent, the S&P 500 rose 0.59 percent, while the Nasdaq Composite Index climbed 0.95 percent.
Earlier in the session, the Dow reached an intraday record high of 16,318.11 while the S&P 500 hit a high of 1,829.75.
In 2013 so far, the Dow has gained 27 percent, while the S&P 500 has risen 31 percent and the Nasdaq has added 39 percent. And next year is looking up as well.
“The positive assessment the IMF gave with regard to US growth corroborates the improving economic indicators we have been witnessing,” Konstantin Giantiroglou, head of investment advisory at Neue Aargauer Bank in Brugg, Switzerland, told Bloomberg News. “The sentiment going into Christmas and the New Year is good. We have an improving global economy and for the first time since the financial crisis we should see a synchronous recovery. We should see a continuation of the bull market in 2014.”
The latest reports showed that US consumer spending increased last month, climbing by the most in five months, while the Thomson Reuters/University of Michigan final index of consumer sentiment increased to 82.5 in December, up from 75.1 a month earlier.
Shares of Apple rose, last up 3.3 percent to US$567.19, on its agreement with China Mobile. China Mobile will sell the iPhone 5s and 5c models in its retail stores beginning January 17.
"This is just good news, and a much bigger strategic deal than had been forecast," Oliver Pursche, president of the Suffern, New York-based Gary Goldberg Financial Services, told Reuters. "Apple is incredibly undervalued at this stage, and this deal can help it trade well beyond US$600 early in 2014."
In Europe, the Stoxx 600 Index finished the day with a 0.7 percent gain from the previous close. France’s CAC 40 rose 0.5 percent, Germany’s DAX added 0.9 percent, while the UK’s FTSE 100 climbed 1.1 percent.