While you were sleeping: Nasdaq touches record high
Sept. 23 (BusinessDesk) - Wall Street climbed, pushing the Nasdaq to a fresh intraday record high, as investors repositioned themselves after the US Federal Reserve kept its target interest rate steady and hinted at a potential December hike.
"Lower for longer is a good thing for the equity markets," Paul Nolte, portfolio manager at Kingsview Asset Management in Chicago, told Reuters. "It basically says risk back on.”
In 3.08pm trading in New York, the Dow Jones Industrial Average rose 0.6 percent, while the Nasdaq Composite Index climbed 0.8 percent. In 2.54pm trading, the Standard & Poor’s 500 Index advanced 0.6 percent.
Gains in shares of Procter & Gamble and those of United Technologies, recently trading 1.2 percent and 1.1 percent stronger respectively, spearheaded the advance of the Dow. Bucking the trend were shares of Pfizer and those of DuPont, down 0.4 percent and 0.3 percent respectively, for the only declines in the Dow in afternoon trading.
US Treasuries were steady, with the 10-year note yielding 1.64 percent.
“The strategy going forward is to buy duration on dips for investors who agree with us that economic activity and inflation data are unlikely to strengthen into year-end,” Jabaz Mathai, a rates strategist at Citigroup in New York, wrote in a research note, according to Bloomberg.
There were fresh signs of strength in the US jobs market. A Labor Department report showed that initial claims for state unemployment benefits fell 8,000 to a seasonally adjusted 252,000 for the week ended September 17.
“The economy is stronger than we thought with another turn tighter of the screw for the labour market," Chris Rupkey, chief economist at MUFG Union Bank in New York. “If Fed officials are waiting for the economy to improve further before raising rates, they are just too late.”
Meanwhile, some say the US greenback is set to weaken.
"The US dollar decline has more weeks to go, we think about two months," Hans Redeker, Morgan Stanley’s chief global currency strategist in London, told Bloomberg. "We suggest that the US dollar will extend its decline, index-wise, between 4 percent to 5 percent."
In Europe, the Stoxx 600 Index ended the day with an increase of 1.6 percent from the previous close. The UK’s FTSE 100 Index advanced 1.1 percent, while Germany’s DAX index and France’s CAC 40 index each rallied 2.3 percent.
“The good thing about Europe is that it’s not that expensive and it has the possibility of earnings delivering more than expectations,” Pierre Mouton, a fund manager at Notz, Stucki & Cie in Geneva, told Bloomberg. “The strategists are probably getting less pessimistic, with a good chunk of bad news already behind us. There are good companies out there.”