View the article online at http://citywire.co.uk/money/article/a601803
Overnight Markets: US stocks extend rally as stimulus hopes rise
The Dow Jones gained 72 points, the S&P 500 rose nine points and the Nasdaq added 25 points.
US stocks extended a rally for a third day on Tuesday led by energy shares after data showed factory orders exceeded estimates and speculation increased for central bank stimulus.
The Dow Jones industrial average gained 72 points, or 0.56%, to 12,944. The Standard & Poor's 500 Index rose nine points, or 0.62%, to 1,374. The Nasdaq Composite Index added 25 points, or 0.84%, to 2,976.
Shares gained yesterday after a series of weak economic data increased expectations that the European Central Bank will slash interest rates to a record low on Thursday.
There was speculation that the Federal Reserve will also announce a third round of asset purchases to stimulate growth in its next policy meeting on 31 July - 1 August after a report on Monday showed US manufacturing contracted in June. The International Monetary Fund has said that the US economy will grow by 2% this year and about 2.25% in 2013 amid a “tepid” recovery and the European debt crisis.
Contributing to the positive sentiment, the Commerce Department said new orders for manufactured goods increased 0.7% during May. Economists had forecast orders rising 0.2%.
Energy shares were the top gainers yesterday with Brent crude oil topping $101 a barrel for the first time in three weeks as tension over Iran increased supply concerns.
Major automakers also rose after posting stronger-than-expected sales gains in June. Ford Motor gained 2.2%, while General Motors added 5.6%.
Facebook Inc. climbed 1.4% as General Motors is said to be talking with the largest social-networking company about resuming advertising.
Elsewhere, Alcoa, the largest US aluminum producer, added 3.2%. Caterpillar, the biggest maker of construction equipment, advanced 3.3% and Apple, the biggest company by market value, gained 1.2%.
In deal news, MModal, the largest provider of medical transcription services, surged 8.4% after it agreed to be bought by a JPMorgan Chase & Co. unit for about $1.1 billion.
In Asia, stocks gained on Wednesday in the afternoon session amid strong US factory data and as commodities climbed to a two-month high on hopes central banks will act to boost economic growth.
The MSCI Asia Pacific Index advanced 0.5% to 119 as of 1:28 p.m. in Tokyo. Australia’s S&P/ASX 200 Index gained 1% and South Korea’s Kospi Index rose 0.3%. Japan’s Nikkei 225 Stock Average advanced 0.4% and the broader Topix Index increased 0.2%. China’s Shanghai Composite Index was little changed and Hong Kong’s Hang Seng Index gained 0.2%.
News sponsored by:
More about this:
Tools from Citywire Money
From the ForumsForums are temporarily down for maintenance.
Weekly email from The Lolly
Get simple, easy ways to make more from your money. Just enter your email address below
An error occured while subscribing your email. Please try again later.
Thank you for registering for your weekly newsletter from The Lolly.
Keep an eye out for us in your inbox, and please add firstname.lastname@example.org to your safe senders list so we don't get junked.