Stocks climb as Fed calms investors; bond prices up

Vickie Mathis
07:05, Sep 24, 2016
Copyright 2015 All rights reserved. This material can't be published, transferred, copied or redistributed.

The US markets closed higher on Thursday, with the Nasdaq Composite notching a record close, as investors' enthusiasm following the Federal Reserve's most recent policy update spilled over into a second session.

"The Fed probably appeared less hawkish than what the markets had expected", said Ryan Larson, head of equity trading at RBC Global Asset Management in Chicago. "It basically says risk back on".

The Dow Jones industrial average was up 118.58 points, or 0.65%, to 18,412.28, the S&P 500 had gained 12.05 points, or 0.56%, to 2,175.17 and the Nasdaq Composite had added 33.20 points, or 0.63%, to 5,328.38. The S&P 500 index added 14 points, or 0.7%, to finish at 2,177. Bucking the trend were shares of Pfizer and DuPont, down 0.4% and 0.3% respectively.

US crude was up $1, or 2.2 percent, at $46.34 a barrel, while Brent crude futures rose 65 cents, or 1.4 percent, to $47.48. Copper futures and gold also rose.

Rising commodity prices have helped the shares of mining and commodities-trader Glencore rebound this year. Shares of Transocean Ltd. finished up 5.6%, Murphy Oil Corp. shares rose 4.3%, Diamond Offshore Drilling Inc. advanced 2.7%, and ConocoPhillips closed up 2.4%. The shares fell 29% one day last September on concerns it would struggle with its debt load.

United States benchmark 10-year Treasury notes rose 9/32 in price, yielding 1.637 per cent, down 4 basis points from Wednesday.

"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 NY, wrote in a research note, according to Bloomberg.

2 wounded, man held after Las Vegas airport lot shooting
Traffic is backed up approaching McCarran International Airport amid a shooting investigation on September 19, 2016. Police via Twitter reported the airport connector tunnel was closed to traffic as the shooting was investigated.

Economic news: The number of people who applied for first-time US unemployment-insurance benefits fell by 8,000 to 252,000 in the week that ended September 17, marking 81 weeks that initial claims remained below the key 300,000 level, the longest streak since 1970.

"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 NY.

The Fed said it could hike rates by year-end as the labor market improved further, but scaled back the number of rate increases expected in 2017 and 2018.

Yahoo Inc.'s stock (YHOO) closed up fractionally as the ailing internet pioneer confirmed a data breach (http://www.marketwatch.com/story/yahoo-says-information-on-at-least-500-million-user-accounts-is-stolen-2016-09-22-141035741) that exposed at least 500 million user accounts.

MSCI's all-country world stock index was up 1.3%, while Europe's STOXX 600 was up 1.8%.

"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.

"As long as the dollar remains stable, it is good news for commodities, especially oil, emerging markets and USA manufacturers", Chiavarone said. "There are good companies out there".

Copyright 2015 All rights reserved. This material can't be published, transferred, copied or redistributed.


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