Mon, 17 May 2021

Bulls cheer as U.S. stocks continue on upward trajectory

Lola Evans
30 Apr 2021, 06:10 GMT+10

NEW YORK, New York - U.S. stocks moved to record highs again on Thursday, spurred on by a raft of positive economic data, trillions of dollars in government stimulus, and historically low-interest rates, set to remain low for some time, according to the Federal Reserve following their monthly two-day meeting, which concluded on Wednesday.

The U.S. Commerce Department revealed on Thursday that the economy grew at an annual rate of 6.4 percent in the first quarter.

"The increase in first-quarter GDP (gross domestic product) reflected the continued economic recovery, reopening of establishments, and continued government response related to the COVID-19 pandemic," the department's Bureau of Economic Analysis said in the "advance" estimate.

U.S. initial jobless claims registered 553,000 in the week ending 24 April, a decline of 13,000 from the prior week's revised level, the Department of Labor said on Thursday. The reading was higher than the 528,000 estimate issued by Dow Jones.

The rise in GDP, and the jobless claims data coincides with Wednesday's decision by the U.S. Federal Reserve to keep interest rates unchanged at near-zero.

"With no meaningful change to monetary policy or communication, this meeting was simply a message to market participants to sit back and observe as the economic recovery continues to unfold," Charlie Ripley, senior investment strategist for Allianz Investment Management, said in an email Wednesday, as reported by Yahoo! Finance.

"The Fed did acknowledge the pick-up in the pace of the economic recovery but came short of signaling any changes to policy at this stage in the cycle. It is difficult to argue the Fed's position on inflation given the amount of slack that still exists in the labor market. However, if the recovery continues to gain strength, we expect the Fed will need to move away from peak policy accommodation."

The Dow Jones jumped 239.98 points or 0.71 percent on Thursday, to close at 34,060.36.

The Standard and Poor's 500 rose 28.29 points or 0.68 percent to a new closing record of 4,211.47.

The tech-laden Nasdaq Composite cruised up 31.52 points or 0.22 percent to 14,082.55.

The U.S. dollar was barely changed on Thursday. Around the New York close, the euro was fetching 1.2128. The British pound traded at 1.3947. The Japanese yen was unmoved at 108.87. The Swiss franc was little changed at 0.9083.

The Canadian dollar edged higher to 1.2277. The Australian dollar retreated somewhat to 0.7773. The New Zealand dollar dipped to 0.7248.

The mood on equity markets overseas was not as jubilant as in the U.S.

German shares fell on Thursday, with the benchmark Dax losing 137.98 points, or 0.90 percent, to close at 15,154.20 points.

Reinsurance company Munich Re lost the most among the blue chips, down by 6.59 percent, followed by automotive supplier Continental and energy group RWE group, which lost 4.35 percent and 3.80 percent respectively, according to a report by the Xinhua news agency.

Deutsche Bank, marketplace organizer for the trading of shares and securities Deutsche Boerse group and sportswear and equipment maker Adidas were the top three winners, rising 3.05 percent, 0.81 percent and 0.68 percent respectively.

Chemical group BASF was the most-traded share with a turnover of 417.34 million euros ($506.19 million).

China's Haier, a leading global household appliances manufacturer listed in Frankfurt in 2018, lost 0.52 percent to close at 1.850 euros per share on Thursday, said the Xinhua report.

In London, the DTSE 100 was flat, edging down just 2.19 points or 0.03 percent to 6,961.48.

The Paris-based CAC 40 eased 4.41 points or 0.07 percent, to close Thursday at 6,302.57.

In Japan, the nikkei 225 advanced 62.08 points or 0.21 percent to 29,053.97.

The Shanghai Composite in China gained 17.83 points or 0.52 percent to 3,474.90.

The Australian All Ordinaries added 23.60 points or 0.32 percent to 7,343.60.

The Hang Seng in Hong Kong climbed 231.92 points or 0.80 percent to close Thursday at 29,303.26.

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