clear
Wednesday June 20th, 2018 6:59AM
6:01AM ( 58 minutes ago ) Weather Alert

Stocks rise following ECB rate decision, strong US data

By The Associated Press
Related Articles
  Contact Editor

NEW YORK (AP) — U.S. stocks mostly ticked higher on Thursday after Europe's central bank became the latest to spell out how it will close the spigot on the emergency stimulus it's flooded into the market in recent years.

More evidence also arrived that the U.S. economy is improving, including a better-than-expected report on retail sales, and the S&P 500 was on pace for its fourth gain in the last five days.

KEEPING SCORE: The S&P 500 was up 8 points, or 0.3 percent, at 2,783, as of noon Eastern time. The Dow Jones industrial average was virtually flat at 25,201, and the Nasdaq composite rose 62, or 0.8 percent, to 7,758.

STIMULUS WATCH: The European Central Bank said it will begin phasing out its bond-buying program in the autumn before ending it after December. That could have worried investors, who have grown accustomed to big stimulus programs from central banks in support of markets. But the ECB also said that it will hold off raising interest rates until at least the summer of 2019, which was more accommodative than some investors had been expecting.

Europe's central bank is following the lead of its U.S. counterpart, the Federal Reserve, which has already halted its bond purchases and raised interest rates seven times since late 2015. Its latest move was on Wednesday, when it raised its benchmark rate by another quarter of a percentage point and indicated two more increases may come this year. Higher rates can help stave off inflation, but they can also hinder economic growth.

Next up on the global calendar is the Bank of Japan, which meets Friday on interest-rate policy. Many economists expect it to announce no changes to its stimulus program.

END OF AN ERA? The ECB's move on Thursday is the latest step away from the massive programs put in place following the Great Recession.

"It is momentous because you're moving to something more normal," said Brent Schutte, chief investment strategist at Northwestern Mutual Wealth Management. "At the same time, you're moving grudgingly toward that. Central banks around the world are going to err toward being more accommodative, and they don't want to cause a market shock."

Both the Fed and the ECB have said that their next moves will depend on what the economic data says, and if growth is strong enough, they'll raise rates more quickly. That could end up making markets around the world more volatile, Schutte said, as investors handicap what each weekly or monthly economic report means for interest rates.

WORLD MARKETS: European stocks were up more than U.S. indexes, with France's CAC 40 rising 1.4 percent and Germany's DAX up 1.7 percent. The FTSE 100 in London gained 0.8 percent. In Asia, Japan's Nikkei 225 index dropped 1 percent, South Korea's Kospi sank 1.8 percent and the Hang Seng in Hong Kong lost 0.9 percent.

Stocks from developing economies continued their struggles, which have been compiling since the spring. Investors worry that higher U.S. interest rates will hurt emerging-market economies, and the MSCI Emerging Markets index fell 0.9 percent

STRONG US ECONOMY: U.S. retail sales jumped in May after shoppers spent more at home and garden stores, gas stations and restaurants. They likely felt emboldened by a strong job market, which has helped to lift consumer confidence.

The retail-sales numbers are scrutinized for indications of overall consumer spending, which accounts for the bulk of the U.S. economy. Economists say economic activity is likely picking up following a slowdown in growth during the first quarter of the year.

A separate report showed that fewer workers filed for unemployment claims last week than economists expected, an encouraging sign for the labor market.

CRUISING: Royal Caribbean Cruises jumped to the biggest gain in the S&P 500 after it agreed to buy a two-thirds stake in Silversea Cruises for about $1 billion. The acquisition will give Royal Caribbean more access to the luxury cruising market.

Royal Caribbean rose 5.2 percent to $113.58.

YIELDS: The yield on the 10-year Treasury fell to 2.95 percent from 2.98 percent late Wednesday. It gave up all its gains from the prior day, when the Federal Reserve surprised some investors by speeding up its timetable for rate increases.

YIELD PLAYS: Lower interest rates can boost demand for dividend-paying stocks, which begin to look more attractive to income investors. Telecom stocks, utilities and real-estate investment trusts are among the biggest dividend payers in the market, and they were the top-three performing sectors in the S&P 500.

Financial stocks had the biggest loss among the 11 sectors that make up the index, at 0.9 percent. Lower interest rates can crimp the profit they earn from making loans.

CURRENCIES: The dollar fell to 110.46 Japanese yen from 110.55 yen late Wednesday. The euro fell to $1.1634 from $1.1773, and the British pound fell to $1.3332 from $1.3358.

COMMODITIES: Benchmark U.S. crude dipped 9 cents to $66.55 per barrel. Brent crude, the international standard, fell 73 cents to $76.01.

Gold rose $6.50 to $1,307.80 per ounce.

___

AP Business Writer Youkyung Lee contributed from Seoul, South Korea.

  • Associated Categories: Associated Press (AP), AP Business, AP Business - Economy, AP Business - Financial Markets, AP Business - Industries, AP Business - Financial Services, AP Business - Utilities
© Copyright 2018 AccessWDUN.com
All rights reserved. This material may not be published, broadcast, rewritten, or redistributed without permission.
Fewer US teens smoking, doing drugs ... and drinking milk
Survey shows fewer US teens smoking, having sex, doing drugs .... and drinking milk
7:04PM ( 19 minutes ago )
Musk company to build Chicago-to-O'Hare express transport
Entrepreneur Elon Musk says a high-speed transportation system that will whisk people between downtown Chicago and O'Hare International Airport at speeds of up to 150 mph could be operational in about three years
6:52PM ( 31 minutes ago )
GOP lawmakers decry family separations as WH defends policy
Congressional Republicans distance themselves from the Trump administration's aggressive policy of separating children from their parents at the border
6:52PM ( 32 minutes ago )
Associated Press (AP)
Trump accused in lawsuit of misusing charitable foundation
New York's attorney general has filed a lawsuit accusing President Donald Trump of using money from his charitable foundation to settle disputes involving his business empire and boost his political fortunes during his run for the White House
6:29PM ( 54 minutes ago )
Saudi-led troops fight rebel forces south of Yemen's Hodeida
Troops in a Saudi-led coalition have captured a town south of Yemen's port city of Hodeida
5:55PM ( 1 hour ago )
Trump nearing decision on tough China tariffs
President Donald Trump is closing in on a decision to impose tariffs on Chinese goods, a move that could put his trade policies on a collision course with his push to get rid the Korean Peninsula of nuclear weapons
5:35PM ( 1 hour ago )
AP Business
Stocks rise as economy strengthens, central banks step back
US stocks ticked higher Thursday after Europe's central bank laid out how it will close the spigot on the emergency stimulus it's flooded the market with in recent years
4:53PM ( 2 hours ago )
IMF: Tax cuts boosting US now but will hurt growth later
IMF projects tax cuts will boost US economy in 2018, 2019, but then hamper growth in following years
4:38PM ( 2 hours ago )
Stocks edge up following ECB rate decision, strong US data
US stocks ticked higher Thursday after Europe's central bank laid out how it will close the spigot on the emergency stimulus it's flooded the market with in recent years
3:13PM ( 4 hours ago )
AP Business - Economy
European Central Bank winds down crisis-era stimulus program
The European Central Bank says it will phase out at the end of the year its stimulus program, which is credited with helping the eurozone economy recover from its region's financial crisis
10:36AM ( 8 hours ago )
Strong retail sales help lift US stocks early
US stocks ticked higher Thursday after Europe's central bank laid out how it will close the spigot on the emergency stimulus it's flooded the market with in recent years
10:14AM ( 9 hours ago )
European Central Bank sets end date for stimulus program
The European Central Bank says it will phase out at the end of the year its stimulus program, which is credited with helping the eurozone economy recover from its region's financial crisis
8:07AM ( 11 hours ago )
AP Business - Financial Markets
The Latest: Musk says O'Hare express line could open in 2021
Chicago has chosen a company founded by Tesla CEO Elon Musk to build an express service from downtown to O'Hare International Airport reaching speeds up to 150 mph.
4:29PM ( 2 hours ago )
Proposed US banking fix for marijuana may not open all doors
A proposal in Congress to ease the U.S. ban on marijuana could encourage more banks to do business with cannabis companies, but it appears to fall short of a comprehensive fix
4:11PM ( 3 hours ago )
US retail sales boom in May, but inflation is lurking
US retail sales climb by the most in 6 months as American confidence grows, but can the pace be maintained?
10:13AM ( 9 hours ago )
AP Business - Industries
Fed raises key rate and sees possible acceleration in hikes
Fed hikes key rate for second time this year and signals possible acceleration in future hikes
5:14PM ( 1 day ago )
Stocks slip after Fed says interest rates will rise faster
US stocks finish lower after the Federal Reserve raises interest rates for the second time this year and says it expects to increase rates two more times this year
4:57PM ( 1 day ago )
Stocks wobble after Fed says interest rates will rise faster
US stocks are mixed after the Federal Reserve raises interest rates for the second time this year and says it expects to increase rates two more times this year
3:31PM ( 1 day ago )
AP Business - Financial Services
Trump declares oil prices too high, blames OPEC
President Donald Trump is blaming OPEC for high oil prices but other factors are driving up the numbers
4:56PM ( 1 day ago )
Stocks mostly rise following Trump-Kim summit
U.S. and global stock markets mostly rose Tuesday as investors reacted calmly to the outcome of a meeting between President Donald Trump and North Korean leader Kim Jong Un.
5:46PM ( 2 days ago )
Energy regulators: No grid emergency to justify coal bailout
Federal regulators dispute Trump administration's claim that struggles facing the coal and nuclear industries threaten the reliability of the power grid
4:57PM ( 2 days ago )
AP Business - Utilities
Fewer US teens smoking, doing drugs ... and drinking milk
Survey shows fewer US teens smoking, having sex, doing drugs .... and drinking milk
7:04PM ( 20 minutes ago )
Musk company to build Chicago-to-O'Hare express transport
Entrepreneur Elon Musk says a high-speed transportation system that will whisk people between downtown Chicago and O'Hare International Airport at speeds of up to 150 mph could be operational in about three years
6:52PM ( 31 minutes ago )
GOP lawmakers decry family separations as WH defends policy
Congressional Republicans distance themselves from the Trump administration's aggressive policy of separating children from their parents at the border
6:52PM ( 32 minutes ago )
UAE: US rejects military aid request in Yemen port assault
A senior official from the United Arab Emirates says the U.S. has rejected three separate requests for military assistance in the ongoing Saudi-led coalition attack on the Yemeni port of Hodeida
6:52PM ( 32 minutes ago )
Missouri denies legal bills for lawyers of ex-Gov. Greitens
A top Missouri official has decided not to pay the legal bills for attorneys who represented former Gov. Eric Greitens' office against potential impeachment proceedings
6:43PM ( 41 minutes ago )