US STOCKS rallied yesterday after minutes from the Federal Reserve’s latest policy meeting showed a more supportive stance than investors had previously expected.
All three major US stock indexes ended up more than one per cent, with eight of the 10 S&P 500 sector indexes closing higher. Internet and biotech stocks were among the day’s biggest gainers.
Fed officials were unanimous in wanting to ditch the thresholds they had been using to telegraph a policy tightening, according to minutes of a meeting last month that shed little new light on what might prompt an eventual interest-rate rise.
“People are taking solace in the idea that the Fed may be more accommodative than previously thought, for longer than previously thought,” said Steve Sosnick of Timber Hill/Interactive Brokers.
“That’s giving the lift to stocks.”
Alcoa shot up 3.8 per cent to end at $13. The stock ranked as one of the S&P 500’s best performers after the aluminium producer’s earnings, excluding restructuring charges and other special items, exceeded analysts’ expectations.
S&P 500 companies’ first-quarter earnings are projected to have increased just one per cent from a year ago, Thomson Reuters data showed, down sharply from the start of the year, when profit growth was estimated at 6.5 per cent.
The Dow Jones industrial average rose 181.04 points or 1.11 per cent, to end at 16,437.18. The S&P 500 gained 20.22 points or 1.09 per cent, to finish at 1,872.18. The Nasdaq Composite added 70.914 points or 1.72 per cent, to close at 4,183.90.