US stocks rose yesterday, rebounding from the previous session’s losses, as tepid economic data eased concerns the US Federal Reserve would begin to gradually scale back its policy of stimulating growth.
The day’s gain put the S&P 500 on track to end the month about 3.6 per cent higher, while the Dow was up 3.3 per cent for the month so far. The Nasdaq was up 4.9 per cent.
Stocks have been volatile recently and closely tied to alternating views of the future of the Fed’s loose monetary policy. Shares tumbled on Wednesday on concern the Fed would curb its bond-buying because of signs the economy was strengthening. US Treasury bond yields rose to the highest in 13 months the same day, also influenced by concern about possible Fed tapering.
“It won’t be until around September before we really hear about possible changes in Fed (policy), but the market is volatile because at these levels, profit-taking is part of a hedging method to protect against possible downsides,” said Randy Frederick, director of trading and derivatives at Charles Schwab.
“After the profit-taking, the market moves right back up because it's a great buying opportunity, like today.”
The Dow Jones industrial average was up 21.73 points, or 0.14 per cent, at 15,324.53. The Standard & Poor’s 500 Index was up 6.05 points, or 0.37 per cent, at 1,654.41. The Nasdaq Composite Index was up 23.78 points, or 0.69 per cent, at 3,491.30.
Data showed first-time claims for unemployment benefits rose in the latest week while the government's latest reading on first-quarter gross domestic product came in slightly below forecasts. Loose monetary policies by central banks around the world have helped drive both the Dow and the S&P 500 to record highs. The S&P 500 is up more than 16 per cent this year so far.
New York Report