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December 18, 2017
Wednesday, December 17, 2014

Wall Street rallies after Fed statement; S&P has best day this year

The S&P 500 scored its best day since October 2013 as the Federal Reserve gave an upbeat assessment of the economy and said it would take a patient approach toward lifting interest rates.

The rally, which followed a three-day losing streak, was also driven by a 4.2 percent gain in the S&P energy index .

Following a two-day meeting, the US central bank gave a strong signal that it was on track to raise interest rates sometime next year. The Fed statement came against a backdrop of solid domestic economic growth but trouble overseas.

Also supporting stocks, Fed Chair Janet Yellen it was not a major concern that some banks may be leveraged and exposed to oil price moves. US and Brent oil are down roughly 50 percent since June.

The Dow Jones industrial average rose 288 points, or 1.69 percent, to 17,356.87, the S&P 500 gained 40.15 points, or 2.04 percent, to 2,012.89 and the Nasdaq Composite added 96.48 points, or 2.12 percent, to 4,644.31.

All 10 S&P sector ended higher.

Shares of Exxon Mobil jumped 3 percent to $89.02. Energy shares have which has fallen sharply with the recent heavy selloff in oil prices.

Earlier in the day, data showed US consumer prices recorded their biggest drop in nearly six years in November as gasoline prices tumbled.

Shares of the Herzfeld Caribbean Basin Fund, a closed-end mutual fund listed on Nasdaq, hit a seven-year high as President Barack Obama announced a move to normalize relations between the United States and Cuba.

The fund, which holds stocks and assets that fund manager Thomas Herzfeld believes would benefit from an eventual end to the US economic embargo against Cuba, rose 28.9 percent to $8.78.

About 9.4 billion shares changed hands on US exchanges, above the 7.3 billion average this month, according to BATS Global Markets.

NYSE advancing issues outnumbered decliners 2,777 to 353, for a 7.87-to-1 ratio; on the Nasdaq, 2,214 issues rose and 545 fell for a 4.06-to-1 ratio.

In Europe, equities staged a late recovery on Wednesday, as a rebound in energy stocks and new signs of economic stimulus measures from the European Central Bank lifted shares.

Brent crude, which is still down nearly 50 percent in six months, moved above $60 a barrel as US data showed falling crude inventories.

The oil price recovery lifted the STOXX Europe 600 Oil & Gas Index by 3.3 percent.

Energy stocks added the most points to the pan-European FTSEurofirst 300 index, which had spent much of the day mired in negative territory due to concerns over financial turmoil in Russia but closed up 0.1 percent at 1,316.76 points.

The euro zone's blue-chip Euro STOXX 50 index also shrugged off earlier losses to end up 0.1 percent.

The hard-hit Greek market also bounced ahead of a tight parliamentary vote that will trigger elections unless the Greek prime minister can win backing from independents and smaller parties that have so far rejected helping his coalition.

Germany's DAX equity index missed out on the market rebound and fell 0.2 percent. The DAX has many companies that export to Russia, where the rouble has come under heavy selling pressure this week despite an interest rate hike by the central bank.

This week's slump in the rouble, which rebounded today, has revived memories of its 1998 collapse which sparked a sell-off in European equities. The DAX plunged nearly 40 percent in 2-1/2 months during the 1998 crisis.

Greek Prime Minister Antonis Samaras failed to secure a majority on Wednesday in the first of three rounds of a presidential vote that will determine whether the country is forced into snap national elections and a new period of political chaos.

Failure to elect a president with a three-fifths majority in parliament triggers early elections, which polls show would probably be won by the radical leftist Syriza party that promises to axe the bailout scheme Greece uses to keep afloat.

Meanwhile, Japanese stocks rose today, moving away from a 6-1/2-week low as hopes of a continuation of the US Federal Reserve's dovish stance helped sentiment recover, while Japan Tobacco Inc tumbled.

Japan Tobacco, which is highly exposed to crisis-hit Russia, dived 7.8 percent on heavy volume and contributed a hefty negative 10 points to the Nikkei. It was the fourth most traded stock by turnover.

Goldman Sachs said Russia contributes 20-25 percent of its operating profits, and a 1 percent rouble depreciation reduces its profit by almost 3 billion yen.

The Nikkei benchmark ended 0.4 percent higher at 16,819.73, moving away from 16,672.94 hit earlier in the day, the lowest level since October 31.

The broader Topix shed 0.1 percent to 1,352.01, while the JPX-Nikkei Index 400 dropped 0.2 percent to 12,259.36.

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Tags:  Stocks  shares  FTSEurofirst  Nikkei  US  Dow Jones  





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