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Wednesday, July 29, 2015

Wall Street ends higher after Fed leaves investors unruffled

US stocks finished stronger today after the US Federal Reserve said the economy and job market continued to strengthen and left its key interest rate unchanged.

The central bank's comments on the economy and inflation after its two-day pow-wow appeared to do little to drastically change wide expectations that the first rate hike will come in September or possibly December.

No move on rates was expected this week. US interest rates have remained near zero for almost a decade and the Fed has said it will raise rates once it sees a sustained recovery in the economy.

The Dow Jones industrial average rose 0.69 percent to end at 17,751.39. The S&P 500 gained 0.73 percent to 2,108.57 and the Nasdaq Composite added 0.44 percent to finish at 5,111.73.

All 10 major S&P sectors were higher with the energy index's 1.28 percent rise leading the way.

The S&P 500 has bounced about 2 percent higher in the past two days following a deeper near-3 percent drop over the preceding week that had been caused in part by a rout in China's stock markets.

European shares also rose, lifted by strong corporate results and bid activity, including HeidelbergCement's move to take control of Italcementi.

The pan-European FTSEurofirst 300 index closed up 1 percent, while the euro zone's blue-chip Euro STOXX 50 index rose 0.6 percent. Both are up roughly 14 percent so far in 2015.

Global stock markets have lost ground over the last month, amid worries about China's economy and Greece's debt crisis, but a stabilisation of the volatile stock markets in Shanghai and Shenzhen on Wednesday propped up Asian shares.

In Europe, Italcementi surged 49 percent while HeidelbergCement fell more than 6 percent.

Elsewhere, British property company Quintain Estates rose more than 20 percent after a bid from private equity firm Lone Star.

Peugeot gained 6 percent after it reported positive first-half net income for the first time in four years.

Oil major Total also rose after reporting higher-than-expected second-quarter profits.

However, Schneider Electric ended the day flat after lowering full-year forecasts because of weakness in China.


In Asia, MSCI's broadest index of Asia-Pacific shares outside Japan rose 0.4 percent.

Investors are also focused on the outcome of the Fed's two-day policy meeting with markets divided on whether it will take a hawkish or dovish stance, while some suspect it might chose to do neither. No move on rates is expected this week.

In recent congressional testimony, Fed Chair Janet Yellen neither ruled out a September interest rate hike nor guided the market toward thinking it was a done deal.

European and US government bond yields were broadly steady.

In currency markets, investors seemed to decide it was safer not to be actively short of the US dollar ahead of the policy statement. The dollar was up 0.2 percent against the euro at $1.1040 and up 0.1 percent at 123.71 yen. The moves were well within recent ranges in low trading volumes.

In energy markets, oil prices fell as concerns over global oversupply outweighed the impact of a what is likely to be a larger-than-expected draw on US crude stocks.

Brent futures LCOc1 were down 66 cents at $52.66 a barrel and near their lowest since February. US crude for September delivery CLc1 slipped 42 cents to $47.56 a barrel.

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Tags:  US  stock market  Europe  Nikkei  China  





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Edition No. 5055 - This publication is a property of NEFIR S.A. -RNPI Nº 5343955 - Issn 1852 - 9224 - Te. 4349-1500 - San Juan 141 , (C1063ACY) CABA - Director Perdiodístico: Ricardo Daloia