Friday, July 11, 2014





Asia stocks rally on Fed pledge to help US economy


February 17. 2013 12:20AM


Story Tools
PrintPrint | E-MailEMail | SaveSave | Hear Generate QR Code QR
Send to Kindle


(AP) Asian stock markets bounded higher Friday after investors got just what they wanted big moves by the Federal Reserve to help the U.S. economy out of its funk.


The Dow Jones industrial average cleared 13,500 for the first time since the beginning of the Great Recession after the Fed said Thursday it would buy $40 billion of mortgage securities a month until the economy improves. It also pledged to extend super-low interest rates into 2015.


Wall Street rallied on the news, and the enthusiasm spilled over into Asia. Hong Kong's Hang Seng surged 2.8 percent to 20,605.31, a level it hasn't seen since early May.


Japan's Nikkei 225 index jumped 2 percent to 9,179.83 and South Korea's Kospi gained 2.8 percent to 2,004.74. Australia's S&P/ASX 200 added 1.2 percent to 4,392.20. Benchmarks in Singapore, Taiwan, Indonesia and New Zealand also rose. Mainland China's Shenzhen Composite Index fell 0.3 percent to 885.64.


The Fed "is trying to convey to financial market participants that they can count on low interest rates and accommodative monetary policy for a long time and not to expect a reversal of policy in reaction to modest improvement in GDP growth or in the unemployment rate," analysts at HSBC Global Research said in a commentary.


The Fed is under pressure to act because the U.S. economy is still growing too slowly to reduce high unemployment. The unemployment rate has topped 8 percent every month since the recession officially ended more than three years ago.


In August, job growth slowed sharply. Employers added just 96,000 jobs, down from 141,000 in July and well below what is needed to bring relief to the more than 12 million who are unemployed.


The unemployment rate did fall to 8.1 percent from 8.3 percent. But that was because many Americans stopped looking for work, so they were no longer counted as unemployed.


The Fed's latest actions came a week after the European Central Bank announced its most ambitious plan yet to ease Europe's financial crisis by buying unlimited amounts of government bonds to help countries manage their debts.


Analysts said economy-bolstering moves by authorities in the U.S., Europe and China bode well for markets at least in the short-term.


"It certainly seems like sentiment is largely positive now," said Stan Shamu of IG Markets in Melbourne, Australia. "I think everyone will be much happier knowing the Fed will support a recovery."


Among individual stocks, Australia's Fortescue Metals said it halted trading of its shares until Tuesday after media reports the company's finances were stretched due to falling iron ore prices.


Gold shares climbed after the price of the precious metal surged. Hong Kong-listed Zijin Mining Group, China's largest gold miner, soared 11.4 percent. Newcrest Mining, Australia's largest gold miner, jumped 6.9 percent.


On Wall Street, the Dow Jones industrial average rose 1.6 percent to close at 13,539.86. The Standard & Poor's 500 index rose 1.6 percent to 1,459.99. The Nasdaq composite index increased 1.3 percent to 3,155.83.


Benchmark oil was up 98 cents to $99.29 per barrel in electronic trading on the New York Mercantile Exchange. The contract rose $1.30 end at $98.31 per barrel on the Nymex on Wednesday.


In currencies, the euro rose to $1.3028 from $1.2985 late Thursday in New York. The dollar rose to 77.64 yen from 77.45 yen.


Associated Press


Comments
comments powered by Disqus Commenting Guidelines
Poll
Mortgage Minute


Search for New & Used Cars

Make 
Model
 
Used New All
 

Search Times Leader Classifieds to find just the home you want!

Search Times Leader Classifieds to find just what you need!

Search Pet Classifieds
Dogs Cats Other Animals



Social Media/RSS
Times Leader on Twitter
Times Leader on Youtube
Times Leader on Google+
The Times Leader on Tumblr
The Times Leader on Pinterest
Times Leader RSS Feeds