While you were sleeping: Apple bolsters Wall St
Sept. 11 (BusinessDesk) - Wall Street gained as a report suggested the US labour market remains solid ahead of next week’s gathering of Federal Reserve policy makers.
A report showed claims for unemployment benefits fell by 6,000 to 275,000 in the week ended September 5, which was in line with expectations.
“The job market is in good shape,” Ryan Sweet, a senior economist at Moody’s Analytics in West Chester, Pennsylvania, told Bloomberg. “Sub-300,000 initial claims is historically rare but the norm this year.”
A separate report showed US import prices dropped 1.8 percent in August from July, the biggest drop since January.
Most economists still expect the Fed to raise rates this year, as suggested repeatedly by Chair Janet Yellen. However, the probability of a rate hike this month is less than 30 percent according to contracts on the overnight lending rate.
In New York trading at about 3.05pm, the Dow Jones industrial average rose 0.5 percent, the Standard & Poor’s 500 Index advanced 0.8 percent, while the Nasdaq Composite Index climbed 1.1 percent. Shares pared earlier gains in afternoon trading.
"Volatility is here to stay for the rest of the fourth quarter because even if the Fed doesn't raise rates next week, it is signalling that there is weakness in the economy," Mohannad Aama, managing director at Beam Capital Management in New York, told Reuters.
Gains in shares of Apple and those of Pfizer, last up 2.3 percent and 2.1 percent respectively, led the Dow higher.
“We’ve stopped most of the panic about China collapsing and the world falling apart,” said Ben Kumar, a fund manager who helps oversee about US$14 billion at Seven Investment Management in London, told Bloomberg. “The next question we have to deal with is: is global growth strong enough to deal with a Fed rate rise?”
The US Treasury drew solid demand for its US$13 billion auction of 30-year bonds.
Shares of Lululemon Athletica dropped, last trading 16.6 percent lower, after the company posted margins that fell short of expectations.
"You've got inventories that are bloated. You've got margins that are collapsing. And the explanation to all that is less clear," Canaccord Genuity analyst Camilo Lyon told Reuters. "What that leads into is now a disbelief in their ability to recapture the margin levels that they've talked about."
In Europe, the Stoxx 600 Index ended the session with a 1.2 percent decline from the previous close. Germany’s DAX Index slid 0.9 percent, the UK’s FTSE 100 Index fell 1.2 percent, while France’s CAC 40 Index dropped 1.5 percent.