While you were sleeping: US car sales accelerate
Sept 5 (BusinessDesk) – Wall Street gained amid data showing US car sales are on track for their best month in six years, underpinning the view that the world's largest economy is accelerating its recovery.
Shares of General Motors rose, last up 4.7 percent, as did those of Ford, last 3.9 percent stronger. GM said August auto sales were 16.3 million vehicles on a seasonally adjusted annualised basis. This would easily top the 15.8 million annualised sales rate forecast by 45 analysts surveyed by Thomson Reuters.
"The auto industry continues to be a bright spot in the economic recovery," Bill Fay, Toyota division group vice president and general manager, told Reuters.
Indeed, says the US Federal Reserve in its Beige Book released today.
"Reports from the twelve Federal Reserve Districts suggest that national economic activity continued to expand at a modest to moderate pace during the reporting period of early July through late August," the Fed said.
"Consumer spending rose in most Districts, reflecting, in part, strong demand for automobiles and housing-related goods," according to the Beige Book. "Activity in the travel and tourism sector expanded in most areas."
Providing further evidence of increasing demand was a Commerce Department report showing that the US trade deficit widened 13.3 percent to US$39.1 billion in July, from US$34.5 billion in June, according to data.
"We’re going to see more widening in August,” Joshua Dennerlein, an economist at Bank of America Corp. in New York, told Bloomberg News. “Part of that reflects a pickup in domestic demand.”
In late afternoon trading in New York, the Dow Jones Industrial Average rose 0.67 percent, the Standard & Poor's 500 Index advanced 0.79 percent, while the Nasdaq Composite Index gained 0.96 percent.
US Treasuries slid, pushing yields on the 10-year note up four basis points to 2.89 percent.
All eyes are on the next two-day meeting of Fed policy makers starting September 17 amid expectations it will start easing the pace of its US$85 billion a month bond-buying program.
The FOMC this month will probably begin to reduce its bond buying, according to 65 percent of economists surveyed by Bloomberg.
Gains in shares of Intel, last up 2.5 percent, and El du Pont de Nemours, last up 2 percent, propelled the advance of the Dow.
In Europe, the Stoxx 600 Index gained 0.2 percent from the previous close. The UK's FTSE 100 Index rose 0.1 percent, while Germany’s DAX and France’s CAC 40 both increased 0.2 percent.