Wall Street gains after day of jitters
US stocks rose for a third straight day yesterday in a volatile session, after minutes from the latest Federal Reserve meeting boosted expectationsthe central bank will act again to stimulate the economy.
Equities surged near the close of the market, though they quickly pared gains, after the release of the Fed’s 9 August minutes showed the US central bank had considered bold steps to help the fledgling economy.
News earlier in the day showing consumer confidence fell to its worst level in two years cemented the growing belief the Fed will intervene when it meets in late September. Many market participants had thought that the odds of more action from the Fed were slim.
Equities fell as much as one per cent in the morning after the Conference Board, an industry group, reported US consumer confidence crumbled in August to its lowest level in more than two years due in part to fallout from political wrangling over a budget deal. Caterpillar and Boeing were among the top boosts to the Dow. Boeing was upgraded to “neutral” by Nomura, which see improved profits from the company’s 737 and 777 plane programs. Caterpillar rose 1.9 per cent to $89.79, while Boeing gained 2.2 per cent to $65.99.
The market has suffered from a long bout of selling for the better part of August, falling nearly 18 per cent from its 2011 high in April to a recent low, though it has risen for six of the last seven sessions.
The Dow Jones industrial average was up 20.39 points, or 0.18 per cent, at 11,559.64. The Standard & Poor’s 500 Index was up 2.80 points, or 0.23 per cent, at 1,212.88. The Nasdaq Composite Index was up 14.00 points, or 0.55 per cent, at 2,576.11.
The rebound into positive territory was seen as a sign recent selling was overdone. Technical analysts pointed to Monday’s S&P close above 1,200 as a sign bulls may be regaining their footing. The S&P has risen more than seven per cent over the past seven sessions but remains 6.1 per cent lower for August.
Financials were the day’s big losers, with Bank of America off 3.2 per cent to $8.12 and JPMorgan Chase & Co down 1.5 per cent at $37.06. Both firms are Dow components.
In other data, US single-family home prices fell slightly in June as the market crawled along. Volumes were light, with about 7.2 billion shares traded on the New York Stock Exchange, the American Stock Exchange and Nasdaq.