Wealth Manager - the site for professional investment managers

Register to get unlimited access to all of Citywire’s Fund Manager database. Registration is free and only takes a minute.

Overnight Markets: US stocks surge after Fed trims stimulus

Overnight Markets: US stocks surge after Fed trims stimulus

US stocks rose sharply on Wednesday, sending benchmark indexes to record highs, as the Federal Reserve announced it would start to unwind its historic stimulus while still promising to hold interest rates close to zero.

The Dow Jones industrial average surged 293 points or 1.84%, to end at 16,168, a record closing high. The S&P 500 gained 30 points or 1.66%, to finish at 1,811, also a record closing high. The Nasdaq Composite climbed 46 points or 1.15%, to close at 4,070.

Fed confirmed yesterday that the US economy was on firmer footing and put to rest the question of when the central bank would begin to scale back its bond-buying programme.

The central bank said it would cut its monthly asset purchases by $10 billion to $75 billion, while it also indicated that its key interest rate would stay at rock bottom even longer than previously promised.

Shares extended losses just after the announcement, but quickly turned higher and began rallying.

Energy companies' stocks helped lead both the Dow and the S&P 500 higher as oil prices gained. Exxon Mobil gained 2.9%.

Shares of Lennar Corp (LEN.N) jumped 6.3% after the No. 3 US homebuilder reported a 32% jump in fourth-quarter profit. Data on Wednesday showed that US housing starts increased to the highest in nearly six years in November.

Tech shares declined with Jabil Circuit Inc (JBL.N) tumbling 20.5% a day after it forecast current-quarter results way below Wall Street's estimates. Apple Inc (AAPL.O) 0.8%.

Shares of Ford Motor Co (F.N) dropped 6.3% after the No. 2 US automaker warned on Wednesday that the cost of launching new vehicles would take a bite out of its 2014 pretax profit.

In Asia, shares gained on Thursday after the Fed expressed enough confidence in the US labour market to taper asset purchases.

The MSCI Asia Pacific Index advanced 0.5% to 139 as of 11:14 a.m. in Tokyo. Japan’s Topix index rose 1% and the Nikkei 225 climbed 1.6% as the yen touched the lowest intraday level since October 2008.

Australia’s S&P/ASX 200 Index jumped 1.6%. New Zealand’s NZX 50 Index gained 0.5% and South Korea’s Kospi index increased 0.6%. Hong Kong’s Hang Seng Index advanced 0.7%, while China’s Shanghai Composite Index gained 0.1%. Taiwan’s Taiex index added 0.6% and Singapore’s Straits Time Index increased 0.5%.

Leave a comment!

Please sign in or register to comment. It is free to register and only takes a minute or two.
Citywire TV
Play Sarasin’s Boucher: why I like salmon with chocolate

Sarasin’s Boucher: why I like salmon with chocolate

Henry Boucher, manager of the £129 million Sarasin Food & Agriculture Opportunities fund, explains why he is gobbling up salmon and chocolate stocks.

Play Alibaba hype, the UK slowdown and opportunities in European sovereign bonds

Alibaba hype, the UK slowdown and opportunities in European sovereign bonds

Libby Ashby and leading wealth managers analyse what the Alibaba IPO hype means for Chinese equities, slowing growth of the UK economy and whether there’s anything left to play for in the European sovereign bond market.

Play Tesco, Japan and the rise of the central banker

Tesco, Japan and the rise of the central banker

 Libby Ashby and leading wealth managers scrutinise the food retail sector, Japan’s consumption tax hike and political risk in the markets.

Your Business: Cover Star Club

Veteran banker boosts Sanlam’s stockbroking team

Veteran banker boosts Sanlam’s stockbroking team

A veteran private banker has been recruited by Sanlam Private Investments to strengthen its advisory stockbroking team.

Wealth Manager on Twitter