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Overnight Markets: Hopes of more Fed stimulus lift Wall Street
The Dow Jones gained 96 points, the S&P 500 advanced 13 points and the Nasdaq rose 34 points.
Wall Street gained on Tuesday amid speculation the Federal Reserve will agree to extend stimulus measures as the economy struggles to recover and the eurozone's debt crisis gets worse.
The Dow Jones industrial average gained 96 points, or 0.75%, to 12,837 at the close. The Standard & Poor's 500 Index advanced 13 points, or 0.98%, to 1,358. The Nasdaq Composite Index rose 34 points, or 1.19%, to close at 2,930.
The Federal Open Market Committee began the first day of a two-day meeting on Tuesday on interest-rate policy. Equities gained amid expectation that the US central bank may extend its "Operation Twist" programme, its effort to drive down long-term borrowing costs.
In Europe, there was a sharp decline in German business sentiment, alongside stubbornly high Spanish bond yields, raising expectations for stimulus from European policymakers as well.
Growth-related stocks, like Materials and the financials, led the rally. US Steel Corp jumped 9.5% and Bank of America added 4.5%. JPMorgan added 2.2%.
In technology sector, Oracle Corp gained 3.1% a day after it reported stronger-than-expected quarterly profit. Nvidia Corp. rallied 6.7% after Microsoft said its tablet computer will be powered by its Tegra processor.
FedEx Corp surged 2.8% after the package delivery company reported fourth-quarter earnings and provided an outlook for the first quarter and 2013. Shares of J.C. Penney declined 8.5% a day after its president abruptly left the department store operator following a botched advertising campaign.
Walgreen Co tumbled 5.9% after the pharmacy chain reported quarterly earnings and said it would acquire a 45% stake in Alliance Boots for $6.7 billion in a cash-and-stock deal.
In Asia, equities gained on Wednesday in morning trade amid hope the US Fed will extend stimulus measures and after the Group of 20 leaders vowed to support economic growth and help overcome Europe’s debt crisis.
The MSCI Asia Pacific Index climbed 0.8% to 117 as of 10:53 a.m. in Tokyo. Japan’s Nikkei 225 Stock Average gained 0.8% even as the country reported a wider trade deficit in May than economists predicted. South Korea’s Kospi Index added 0.3% and Australia’s S&P/ASX 200 Index rose 0.7%. Hong Kong’s Hang Seng Index increased 0.4% and China’s Shanghai Composite Index lost 0.1%.
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