While you were sleeping: Records fall on Wall Street

While you were sleeping: Records fall on Wall Street

March 3 (BusinessDesk) - Wall Street rose, with the Dow touching a record high and the Nasdaq climbing above 5,000 for the first time in fifteen years amid optimism about the outlook for the US economy and corporate profits.

In afternoon trading on Wall Street, the Dow Jones Industrial Average gained 0.56 percent, the Standard & Poor’s 500 Index rose 0.26 percent, while the Nasdaq Composite Index advanced 0.49 percent. Earlier in the day, the Dow touched a record-high 18,260.31, while the Nasdaq reached 5,001.29.

Gains in shares of Cisco and those of Boeing, last up 2.2 percent and 1.8 percent respectively, helped propel the Dow higher.

The latest US data bolstered the view that the Federal Reserve will lift interest rates soon, boosting the greenback. It gained 0.4 percent against the yen.

Consumer spending adjusted for inflation rose in January, gaining 0.3 percent after a 0.1 percent drop in December, a Commerce Department report showed. Separately, Markit's final US manufacturing purchasing managers' index rose to the highest level in four months in February, climbing to 55.1, up from 53.9 in the previous month.

“The combination of strong production growth, ongoing job creation and rising factory prices will keep alive the possibility that the Fed could be encouraged to start hiking interest rates as early as June,” Chris Williamson, chief economist at Markit, said in a statement.

While Fed Chair Janet Yellen has said the central bank will remain “patient” and is unlikely to raise rates for “at least another couple of FOMC meetings,” some believe that will change as early as this month’s meeting, on March 17 and 18.

"It's likely they remove 'patient' in March," David Stockton, a former Fed research director now at the Peterson Institute for International Economics, told Reuters. "Even if Yellen might not, left to her own devices, be ready to move on rates, there is probably a growing sentiment that the time is getting closer."

Even so, some data disappointed. The Institute for Supply Management’s index slid to 52.9 in February, the lowest in 13 months, and down from 53.5 in January.

In Europe, the Stoxx 600 Index ended the day with a 0.2 percent decline from the previous close, which was the highest in seven years. The UK’s FTSE 100 Index slipped 0.1 percent, after setting an intraday record high, while France’s CAC 40 Index shed 0.7 percent.

Germany’s DAX added 0.1 percent to close at record.

European shares have been advancing in anticipation of the European Central Bank’s plan to start buying more securities. ECB policymakers meet later this week. A report showed euro-zone consumer prices slipped less than forecast last month, while Markit’s euro-zone manufacturing PMI was unchanged at 51.0 in February.

“The eurozone manufacturing sector barely expanded in February, highlighting the malaise that still hangs over the region’s goods-producing economy as a whole,” Markit’s Williamson said.
“However, beneath the disappointing headline figure, different parts of the manufacturing economy are clearly moving at very different speeds, ranging from a Celtic boom to a Gallic slump.”

Meanwhile, Greece’s ASE Index dropped 2.5 percent. Greece could need a third bailout deal when its current program expires in June because markets may still not be prepared to lend to its government, even with a euro-area credit line, European Commission Vice President Valdis Dombrovskis said, according to Bloomberg.

(BusinessDesk)

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