Video | Agriculture | Confidence | Economy | Energy | Employment | Finance | Media | Property | RBNZ | Science | SOEs | Tax | Technology | Telecoms | Tourism | Transport | Search

 


While you were sleeping: US economy gathers steam

While you were sleeping: US economy gathers steam

July 31 (BusinessDesk) - Wall Street was mixed after the US economy kicked into a higher-than-expected gear in the second-quarter while Federal Reserve policy makers reminded investors that the nation’s jobs and housing markets remain weaker than desired.

American gross domestic product grew at a 4.0 percent annual rate, after contracting at a revised 2.1 percent pace in the first quarter, the Commerce Department said.

“The momentum for the second half is solid,” Stuart Hoffman, chief economist at PNC Financial Services Group in Pittsburgh, told Bloomberg News. “The big picture looks a lot brighter and is probably more accurate” than the first-quarter reading suggested.

In late afternoon trading in New York, the Dow Jones Industrial Average was 0.06 percent lower. The Standard & Poor’s 500 index gained 0.16 percent, while the Nasdaq Composite Index increased 0.54 percent.

The Dow fell as declines in shares of Coca-Cola and Pfizer, down 1.6 percent and 1.4 percent respectively, outweighed gains in shares of Nike and General Electric, up 1.7 percent and 1.1 percent respectively.

Fed policy makers agreed to cut the pace of their monthly bond-buying by US$10 billion to US$25 billion a month.

“A range of labour market indicators suggests that there remains significant underutilisation of labour resources,” the Federal Open Market Committee said in a statement.

Indeed, a separate ADP report on Wednesday showed companies hired 218,000 workers in July, fewer than expected and down from June.

“Household spending appears to be rising moderately and business fixed investment is advancing, while the recovery in the housing sector remains slow,” according to the Fed. “Inflation has moved somewhat closer to the Committee's longer-run objective.”

Most took the latest Fed comments as a sign policy makers won’t hike interest rates soon.

"The fact that officials still see excess slack in the labour markets as noteworthy suggests a high level of comfort with leaving rates very low," Omer Esiner, chief market strategist at Commonwealth Foreign Exchange in Washington, told Reuters.

On the earnings front, Twitter was a standout. Shares soared 21.6 percent after the company posted quarterly revenue that exceeded expectations. It had reported after the closing bell on Tuesday in the US.

"We continue to believe we are in the early stages of a very long growth cycle for Twitter as it leverages cultural ubiquity, invests in product and technology, and grows the platform," Goldman Sachs analysts wrote in a report, Reuters reported, adding that Goldman maintained its "buy" rating and raised its price target to US$63 from US$52.

In Europe, the Stoxx 600 Index finished the day with a 0.5 percent drop from the previous close, as did the UK’s FTSE 100 Index. Germany’s DAX fell 0.6 percent, while France’s CAC 40 slumped 1.2 percent.

(BusinessDesk)

© Scoop Media

 
 
 
 
 
Business Headlines | Sci-Tech Headlines

 

Budget Policy Statement: Spending Wins Over Tax Cuts; Big Ticket Items Get Boost

Income tax cuts are on hold as the government says “responding to the earthquakes and reducing debt are currently of higher priority”, although election year tax sweeteners remain possible. More>>

ALSO:

Fishy: Is Whitebaiting Sustainable?

The whitebait fry - considered a delicacy by many - are the juveniles of five species of galaxiid, four of which are considered threatened or declining. The SMC asked freshwater experts for their views on the sustainability of the whitebait fishery and whether we're doing enough to monitor the five species of galaxiid that make up whitebait. More>>

ALSO:

Crown Accounts: Smaller-Than-Expected Four-Month Deficit

The New Zealand government's accounts recorded a smaller-than-forecast deficit in the first four months of the fiscal year on a higher-than-expected inflow of corporate and goods and services tax. More>>

ALSO:

On For Christmas: KiwiRail Ferries Back In Full Operation After Quake

KiwiRail’s Interislander ferries are back in full operation for the first time since the Kaikoura earthquake, with the railspan that allows rail wagons to be loaded on the Aratere now restored. More>>

ALSO:

Comerce Commission Investigation: Prosecutions Over Steel Mesh Labelling

Steel & Tube Holdings, along with two other companies, will be prosecuted by the Commerce Commission following the regulator's investigation into seismic steel mesh, while Fletcher Building's steel division has been given a warning. More>>

ALSO:

Wine: 20% Of Marlborough Storage Tanks Damaged By Quake

An estimated 20 percent of wine storage tanks in the Marlborough region, the country’s largest wine producing area, have been damaged by the impact of the recent Kaikoura earthquake. More>>

ALSO:

ACC: Levy Recommendations For 2017 – 2019 Period

• For car owners, a 13% reduction in the average Motor Vehicle levy • For businesses, a 10% reduction in the average Work levy, and changes to workplace safety incentive products • For employees, due to an increase in claims volumes and costs, a 3% increase in the Earners’ levy. More>>

Get More From Scoop

 
 
 
 
 
 
 
 
Business
Search Scoop  
 
 
Powered by Vodafone
NZ independent news