(Alliance News) - Stocks continued their record run, supported by an improving rate outlook, although a legal challenge took a bite out of Apple.
On Wall Street, the Dow Jones Industrial Average closed up 269.24 points, 0.7%, at 39,781.37. The S&P 500 rose 16.91 points, 0.3%, at 5,241.53 while the Nasdaq Composite climbed 32.43 points, 0.2%, to 16,401.84.
It was another day of record highs for the major benchmarks as investors took heart from a dovish Fed hold and data suggesting the US economy remains sound with hopes for a soft landing intact.
On Wednesday, the Fed left interest rates unmoved, as expected, while its latest set of projections still suggest three cuts will be in the offing this year. The central bank's federal funds rate range was unchanged at 5.25%-5.50%.
"The committee judges that the risks to achieving its employment and inflation goals are moving into better balance. The economic outlook is uncertain, and the committee remains highly attentive to inflation risks," the Fed said.
In a press conference, Fed Chair Jerome Powell refrained from giving a steer on when interest rates would be cut.
"I really don't have anything for you" on any specific meeting call, he said, stressing decisions would be made on a meeting-by-meeting basis.
Economists at Barclays think the Fed is "itching to cut rates this year," and thinks the first cut will come in June.
"In our view, the FOMC would prefer to cut the funds rate sooner than later, and will likely be seeking an opening in the dataflow to initiate cuts in upcoming meetings. Indeed, we were surprised by the benign view that Powell communicated about the recent firm inflation data, the strength of his conviction that the FOMC will deliver a soft landing, and by his reluctance to lean against easing in financial conditions since late last year."
The view that rate cuts were close came as Swiss National Bank made a surprise rate reduction while in the UK, hopes rose of an easing in policy in June after two previous 'hawks' jumped ship, no longer supporting a hike.
For now though, the Bank of England left interest rates unchanged at 5.25%.
The pound fell to USD1.2652 late Thursday, from USD1.2783 on Wednesday. The euro traded at USD1.0858, down from USD1.0921 on Wednesday.
Versus the yen, the greenback rose to JPY151.68, from JPY151.30.
The buoyant mood in equity markets was reflected in Europe, although the mood was a touch more subdued in Paris.
In London on Thursday, the FTSE 100 closed up 1.9%. Frankfurt's DAX 40 closed up 0.9% while the CAC 40 in Paris rose 0.2%.
In Japan on Thursday, the Nikkei 225 index in Tokyo was up 2.0%. In China, the Shanghai Composite closed down 0.1%, while the Hang Seng index in Hong Kong rose 1.9%. The S&P/ASX 200 in Sydney closed up 1.1%.
Economic data confirmed the resilience of the US economy and labour market.
The flash US purchasing managers index composite output index from S&P Global showed a decline to 52.2 in March from 52.5 in February.
The flash US services business activity index fell to 51.7 in March from 52.3 in February.
But while the services sector edged lower, the flash US manufacturing output index rose to a 22-month high of 54.9 in March from 53.5 in February.
Chris Williamson, chief business economist at S&P Global Market Intelligence said: "The brightest news came from the manufacturing sector, where production is now growing at the fastest rate since May 2022. Production gains are linked to improving demand for goods both at home and abroad, driving a further upturn in business confidence in the outlook."
Separately, a manufacturing survey by the Federal Reserve Bank of Philadelphia showed activity in the region continued to expand overall in March.
The March manufacturing business outlook survey's indicator for general activity edged lower but remained positive, while the index for shipments ticked up and the index for new orders turned positive.
The diffusion index for current general activity edged down 2 points to 3.2 in March, its second consecutive positive reading, and only the index's fifth positive reading since May 2022.
Elsewhere, figures showed no cause for alarm in the labour market.
US initial jobless claims were lower than expected in the week just gone, numbers on showed.
According to the Department of Labor, in the week ending March 16, the advance figure for seasonally adjusted initial claims was 210,000, a decrease of 2,000 from the previous week's revised level of 212,000.
This was below the FXStreet-cited market consensus of 215,000.
The previous week's level was revised up by 3,000 from 209,000 to 212,000.
On Wall Street, social media company Reddit made a stellar debut, with shares soaring above the initial public offering price of USD34 each.
Shares closed at USD50.44, a 48% premium to the IPO price raising hopes the depressed IPO market could be poised for a revival.
But Apple was rattled by news the US Department of Justice has sued the firm for illegally maintaining a monopoly for its iPhone by stifling competition and imposing exorbitant costs on consumers.
"If left unchallenged, Apple will only continue to strengthen its smartphone monopoly," said Attorney General Merrick Garland in a statement after filing the wide-ranging case in a New Jersey federal court.
Shares fell 4.1%.
In a further blow for Apple, Bloomberg said the firm, alongside Google parent Alphabet, are set to face European Union investigations into their compliance with a new law for Big Tech firms, paving the way for potentially hefty fines.
Shares in Alphabet declined 0.8%.
Micron Technology fared better, shares soared 14%.
After the market close Wednesday, Micron reported a swing to second-quarter profit and a revenue rise, as the computer memory and storage product producer believes it can benefit from an artificial intelligence revolution in the chip space.
The Idaho, US-based firm said revenue jumped 58% to USD5.82 billion in the second-quarter to February 29, from USD3.69 billion a year prior. Net income totalled USD793 million, a swing from a loss of USD2.31 billion.
"Micron delivered fiscal Q2 results with revenue, gross margin and EPS well above the high-end of our guidance range — a testament to our team's excellent execution on pricing, products and operations," Chief Executive Officer Sanjay Mehrotra said.
Brent oil eased to USD85.81 a barrel on Thursday from USD86.15 on Wednesday. West Texas Intermediate fell to USD80.98 a barrel from USD81.49.
The price of gold eased to USD2,181.60 an ounce on Thursday, compared to USD2,184.36 on Wednesday.
Friday's global economic calendar sees UK retail sales figures at 0700 GMT and the Ifo business climate survey in Germany also at 0700 GMT.
By Jeremy Cutler, Alliance News reporter
Comments and questions to newsroom@alliancenews.com
Copyright 2024, Alliance News
NEW YORK MARKET CLOSE: Stocks jump on rate hopes but Apple limits tech
(Alliance News) - Stocks continued their record run, supported by an improving rate outlook, although a legal challenge took a bite out of Apple.
On Wall Street, the Dow Jones Industrial Average closed up 269.24 points, 0.7%, at 39,781.37. The S&P 500 rose 16.91 points, 0.3%, at 5,241.53 while the Nasdaq Composite climbed 32.43 points, 0.2%, to 16,401.84.
It was another day of record highs for the major benchmarks as investors took heart from a dovish Fed hold and data suggesting the US economy remains sound with hopes for a soft landing intact.
On Wednesday, the Fed left interest rates unmoved, as expected, while its latest set of projections still suggest three cuts will be in the offing this year. The central bank's federal funds rate range was unchanged at 5.25%-5.50%.
"The committee judges that the risks to achieving its employment and inflation goals are moving into better balance. The economic outlook is uncertain, and the committee remains highly attentive to inflation risks," the Fed said.
In a press conference, Fed Chair Jerome Powell refrained from giving a steer on when interest rates would be cut.
"I really don't have anything for you" on any specific meeting call, he said, stressing decisions would be made on a meeting-by-meeting basis.
Economists at Barclays think the Fed is "itching to cut rates this year," and thinks the first cut will come in June.
"In our view, the FOMC would prefer to cut the funds rate sooner than later, and will likely be seeking an opening in the dataflow to initiate cuts in upcoming meetings. Indeed, we were surprised by the benign view that Powell communicated about the recent firm inflation data, the strength of his conviction that the FOMC will deliver a soft landing, and by his reluctance to lean against easing in financial conditions since late last year."
The view that rate cuts were close came as Swiss National Bank made a surprise rate reduction while in the UK, hopes rose of an easing in policy in June after two previous 'hawks' jumped ship, no longer supporting a hike.
For now though, the Bank of England left interest rates unchanged at 5.25%.
The pound fell to USD1.2652 late Thursday, from USD1.2783 on Wednesday. The euro traded at USD1.0858, down from USD1.0921 on Wednesday.
Versus the yen, the greenback rose to JPY151.68, from JPY151.30.
The buoyant mood in equity markets was reflected in Europe, although the mood was a touch more subdued in Paris.
In London on Thursday, the FTSE 100 closed up 1.9%. Frankfurt's DAX 40 closed up 0.9% while the CAC 40 in Paris rose 0.2%.
In Japan on Thursday, the Nikkei 225 index in Tokyo was up 2.0%. In China, the Shanghai Composite closed down 0.1%, while the Hang Seng index in Hong Kong rose 1.9%. The S&P/ASX 200 in Sydney closed up 1.1%.
Economic data confirmed the resilience of the US economy and labour market.
The flash US purchasing managers index composite output index from S&P Global showed a decline to 52.2 in March from 52.5 in February.
The flash US services business activity index fell to 51.7 in March from 52.3 in February.
But while the services sector edged lower, the flash US manufacturing output index rose to a 22-month high of 54.9 in March from 53.5 in February.
Chris Williamson, chief business economist at S&P Global Market Intelligence said: "The brightest news came from the manufacturing sector, where production is now growing at the fastest rate since May 2022. Production gains are linked to improving demand for goods both at home and abroad, driving a further upturn in business confidence in the outlook."
Separately, a manufacturing survey by the Federal Reserve Bank of Philadelphia showed activity in the region continued to expand overall in March.
The March manufacturing business outlook survey's indicator for general activity edged lower but remained positive, while the index for shipments ticked up and the index for new orders turned positive.
The diffusion index for current general activity edged down 2 points to 3.2 in March, its second consecutive positive reading, and only the index's fifth positive reading since May 2022.
Elsewhere, figures showed no cause for alarm in the labour market.
US initial jobless claims were lower than expected in the week just gone, numbers on showed.
According to the Department of Labor, in the week ending March 16, the advance figure for seasonally adjusted initial claims was 210,000, a decrease of 2,000 from the previous week's revised level of 212,000.
This was below the FXStreet-cited market consensus of 215,000.
The previous week's level was revised up by 3,000 from 209,000 to 212,000.
On Wall Street, social media company Reddit made a stellar debut, with shares soaring above the initial public offering price of USD34 each.
Shares closed at USD50.44, a 48% premium to the IPO price raising hopes the depressed IPO market could be poised for a revival.
But Apple was rattled by news the US Department of Justice has sued the firm for illegally maintaining a monopoly for its iPhone by stifling competition and imposing exorbitant costs on consumers.
"If left unchallenged, Apple will only continue to strengthen its smartphone monopoly," said Attorney General Merrick Garland in a statement after filing the wide-ranging case in a New Jersey federal court.
Shares fell 4.1%.
In a further blow for Apple, Bloomberg said the firm, alongside Google parent Alphabet, are set to face European Union investigations into their compliance with a new law for Big Tech firms, paving the way for potentially hefty fines.
Shares in Alphabet declined 0.8%.
Micron Technology fared better, shares soared 14%.
After the market close Wednesday, Micron reported a swing to second-quarter profit and a revenue rise, as the computer memory and storage product producer believes it can benefit from an artificial intelligence revolution in the chip space.
The Idaho, US-based firm said revenue jumped 58% to USD5.82 billion in the second-quarter to February 29, from USD3.69 billion a year prior. Net income totalled USD793 million, a swing from a loss of USD2.31 billion.
"Micron delivered fiscal Q2 results with revenue, gross margin and EPS well above the high-end of our guidance range — a testament to our team's excellent execution on pricing, products and operations," Chief Executive Officer Sanjay Mehrotra said.
Brent oil eased to USD85.81 a barrel on Thursday from USD86.15 on Wednesday. West Texas Intermediate fell to USD80.98 a barrel from USD81.49.
The price of gold eased to USD2,181.60 an ounce on Thursday, compared to USD2,184.36 on Wednesday.
Friday's global economic calendar sees UK retail sales figures at 0700 GMT and the Ifo business climate survey in Germany also at 0700 GMT.
By Jeremy Cutler, Alliance News reporter
Comments and questions to newsroom@alliancenews.com
Copyright 2024, Alliance News