U.S
stocks rose as Federal Reserve minutes reflected caution over raising
interest rates even as the economy improves, further boosting commodity
producers.
The
minutes kept expectations for higher rates pushed into next year,
weakening the dollar and boosting energy, raw-material and industrial
companies amid speculation that a weaker U.S. currency will lift their
profits. Those three industry groups rallied at least 1.4 percent
Thursday.
The
Standard & Poor’s 500 Index added 0.9 percent to 2,013.40 at 4 p.m.
in New York, rising above a level where recent rallies had stalled.
The
Fed’s decision on September 17 to not raise interest rates jolted
investors, as the central bank cited global market turmoil and a
slowdown in China as reasons for standing pat. Equities slid in seven of
eight sessions after the meeting, with the S&P 500 losing 5.7
percent.
Commodity
producers and industrial shares have had their strongest rallies in
years while the dollar has slumped since the weaker-than-forecast
September jobs report set back expectations for higher rates. The
Bloomberg Dollar Index is headed toward a three-week low. Industrials
benefit from the weaker currency when their overseas earnings are
converted back to dollars, while commodities denominated in a lower U.S.
currency are more attractive.
A
report today showed filings for unemployment benefits declined last
week to the lowest level since mid-July, extending a run of applications
near decade lows that shows dismissals remain in check. Managers are
reluctant to trim staffing levels because domestic demand is holding up
in the face of diminished global growth expectations.
Source: Bloomberg
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