December 11, 2017
Thursday, January 8, 2015

Wall Street jumps for 2nd day, helped by economic optimism

US stocks rallied for a second day today, boosted by expectations the US economy will continue to improve and by hopes for more aggressive action from the European Central Bank.

The S&P 500 added 3 percent over the last two sessions, retracing most of its 4.2 percent loss in the previous five trading days, leaving the index in positive territory for 2015. The Dow and Nasdaq also turned up for the year so far.

The advance was broad, with the S&P materials, energy and technology sectors each rising more than 2 percent, leading the day's gains.

Though slightly above expectations, initial claims for state unemployment benefits slipped from the prior week, pointing to a firming labor market ahead of Friday's key monthly payrolls report.

Also boosting sentiment, continued weak euro zone data has been lifting optimism that the European Central Bank will take more aggressive action.

US crude oil, whose free-fall was among the catalysts for the recent selloff in stocks, gained for a second day, settling at $48.79 per barrel. The S&P energy index rose 2.2 percent.

Signs that oil prices may be stabilizing have boosted investor sentiment, although market analysts were still not ready to say prices had found a floor.

The Dow Jones industrial average rose 323.35 points, or 1.84 percent, to 17,907.87, the S&P 500 gained 36.24 points, or 1.79 percent, to 2,062.14 and the Nasdaq Composite added 85.72 points, or 1.84 percent, to 4,736.19.

The S&P 500's two-day gains were its biggest since the Dec. 17-18 Federal Reserve-fueled rally of 4.5 percent. Minutes from that December Fed meeting released Wednesday reassured investors the central bank was in no hurry to start raising interest rates.

European shares rose as a strong Christmas update from Britain's Tesco boosted retailers and Federal Reserve minutes showed the US central bank was not in a hurry to start raising interest rates.

The FTSEurofirst 300 index of top European shares closed 2.9 percent higher at 1,368.37 points, recouping all the ground lost since the start of the year.

Retailers led the bounce, with the STOXX Europe 600 Retail index up 4 percent. Tesco shares jumped 15 percent after it reported better-than-expected sales in the six-week Christmas period and unveiled plans to sell assets and cut hundreds of millions of pounds of costs.

Greek stocks lagged again, falling 2.1 percent after the ECB said Greek banks' access to ECB funding beyond February would depend on Athens successfully completing a final bailout review and agreeing a follow-up plan with its EU/IMF lenders.

The statement was the clearest warning yet that Athens cannot expect to rely on ECB funding if it reneges on obligations under the 240 billion euro bailout programme, a risk that has grown as Greece prepares for Jan. 25's snap election.

Meanwhile, Japanese stocks posted their biggest rise in three weeks today after upbeat US employment data and a rebound in oil prices eased investor concerns about the global economy.

In its best day since December 19, the Nikkei rose 1.7 percent to 17,167.10.

The broader Topix added 1.3 percent to 1,377.67, and the JPX-Nikkei Index 400 gained 1.3 percent to 12,467.23.

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Tags:  Stocks  shares  FTSEurofirst  Nikkei  US  Dow Jones  

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