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December 14, 2017
Wednesday, October 8, 2014

S&P 500 has best day in a year following Federal Reserve minutes

US stocks soared today, with major indexes posting their biggest one-day jumps of 2014 after the Federal Reserve reassured investors that its first interest rate hike would not come until it deemed the economy could withstand it.

The day's gains were broad and gains accelerated near the end of the volatile session. While Wall Street fell in morning trading, with the S&P briefly dipping under its 150-day moving average, all ten primary sectors of the S&P ended higher and only one closed with a gain of less than 1 percent.

The Fed has said that it would not raise rates for a "considerable time," and in the minutes from its Sept. 16-17 meeting the US central bank expressed concern that this could be interpreted "as a commitment" rather than being based on data that pointed to an economy that could grow without Fed stimulus.

Only 21 of the S&P's 500 components ended lower, while the CBOE Volatility index fell 12.2 percent to 15.11.

With the turn higher, the S&P 500 was 2.2 percent below its record close while the Russell 2000 was 9.3 percent away from its record, moving out of the 10 percent threshold that represents a correction.

The Dow Jones industrial average rose 274.83 points, or 1.64 percent, to 16,994.22, the S&P 500 gained 33.79 points, or 1.75 percent, to 1,968.89 and the Nasdaq Composite added 83.39 points, or 1.9 percent, to 4,468.59.

The day marked the biggest one-day advance for both the S&P and Nasdaq since Oct. 10, 2013, when hopes grew for a deal to end a budget stalemate in Washington. It was the best day for the Dow since December.

Volume was heavy, with about 8.4 billion shares traded on all US platforms, according to BATS exchange data, well over the month-to-date average of 7.19 billion.

Advancing issues outnumbered decliners on the NYSE by 2,474 to 608, for a 4.07-to-1 ratio on the upside; on the Nasdaq, 1,917 issues rose and 772 fell for a 2.48-to-1 ratio favouring advancers.

The benchmark S&P 500 index posted 14 new 52-week highs and 23 new lows; the Nasdaq Composite saw 23 new highs and 268 new lows.

European stocks sank in huge trading volumes, extending their week-long selloff and with a benchmark index hitting its lowest level since mid-August as concerns about global economic growth spooked investors.

The FTSEurofirst 300 index of top European shares ended 0.8 percent lower at 1,319.12 points. The benchmark has lost 6.5 percent over the past three weeks.

Europe's renewed sell-off mirrored overnight losses in Asian and US equities after the International Monetary Fund cut global growth forecasts.

In the latest evidence of economic malaise, China's services sector growth weakened in September as new business cooled, another sign the world's second-largest economy may be slowing. The figures came a day after German industrial output fell much further than forecast.

Around Europe, Britain's FTSE 100 index fell 0.2 percent while both Germany's DAX index and France's CAC 40 lost 1 percent.

The euro zone's blue-chip Euro STOXX 50 index fell 0.9 percent to 3,053.31 points, with the index's technical chart showing a bearish 'death cross' signal.

Shares in German business software maker SAP featured among the top losers, down 3.9 percent. Traders cited speculation about weak orders in the fourth quarter and an internal memo in which the company's finance chief urged staff to cuts costs.

Jitters over the spread of Ebola also hurt sentiment, with shares in airlines and travel companies losing ground. TUI lost 3.6 percent, Thomas Cook dropped 2.4 percent and IAG fell 0.7 percent.

Air France-KLM, which said today that the total cost of last month's two-week-long strike by pilots was 500 million euros ($632 million), shed 2.5 percent.

Japanese stocks fell today after surprisingly weak German factory data sparked renewed concerns over global economic growth, bolstering the yen and prompting investors to sell shares in exporters.

The Nikkei share average closed down 1.2 percent at 15,595.98, a five-week closing low. Car manufacturers were a notable victim of the stronger yen.

The Tokyo Stock Exchange's transport equipment makers subindex fell 2 percent, with Mazda Corp falling 3.8 percent. The broader Topix closed down 1.2 percent at 1,274.85, while the new JPX-Nikkei Index 400 fell 1.3 percent to 11,586.10.

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Tags:  Stocks  shares  FTSEurofirst  Nikkei  US  Dow Jones  





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