NEW YORK: Global stocks jumped but the dollar slid on Friday, Sept 24 as economic data both raised hopes the recovery is improving and bolstered speculation the Federal Reserve will boost money supply to aid a struggling economy.
U.S. stocks advanced in a broad rally that lifted Wall Street to a fourth consecutive week of gains. The benchmark Standard & Poor's 500 Index is now up 9.5 percent so far in September.
U.S. oil futures prices climbed above $76 a barrel and gold hit all-time highs above $1,300 an ounce as expectations mounted that the Fed will again pump billions of dollars into the economy to spur growth.
While data on U.S. durable goods orders and home sales were soft, stock traders latched on to a rise in business spending in August as the latest sign the recovery is on firmer ground.
Wall Street gained 2 percent and MSCI's all-country world equity index . rose 1.6 percent. Emerging markets lagged, rising 0.7 percent, according to MSCI.
U.S. Treasury debt and German Bund futures fell in volatile trading as the U.S. data supported a shift out of government bonds and into riskier assets.
Bonds have either gotten expensive or are not providing much of a return, said Jason Pride, director of investment strategy at Glenmede Investment and Wealth Management in Philadelphia, which oversees about $18 billion in assets.
"You're finally in a place now that it's not because the equity equation is so attractive that you do something, it's actually because the safe side of the equation is so unattractive that you do something," Pride said.
The Dow Jones industrial average closed up 197.84 points, or 1.86 percent, at 10,860.26. The Standard & Poor's 500 Index gained 23.84 points, or 2.12 percent, at 1,148.67. The Nasdaq Composite Index rose 54.14 points, or 2.33 percent, at 2,381.22.
The dollar tumbled against a basket of currencies to a low last seen in February on a stronger-than-expected rise in the German Ifo business climate index for September to its highest level in more than three years.
The euro was up 1.34 percent at $1.3489.
Expectations of further dollar weakness underpinned gold, as did inflation jitters on the prospect of another quantitative easing program by the Fed.
U.S. gold futures for December delivery hit a record $1,301.60 an ounce, and settled up $1.80 at $1,298.10.
"The U.S. Fed is obviously contemplating, and the market is expecting, some kind of statement on quantitative easing," said Deutsche Bank analyst Daniel Brebner. "The influx of new money in the system raises longer-term expectations for inflationary forces."
News of revived business spending drew investors away from safe-haven government debt after a week-long bond rally. U.S. traders cited talk of a very large asset allocation trade from bonds to equities.
The benchmark 10-year U.S. Treasury note fell 16/32, its yield rising to 2.61 percent.
U.S. crude oil futures rose sharply, helped by a sliding dollar and expectations the Fed would pump money into the economy.
U.S. crude for November delivery rose $1.31, or 1.74 percent, to settle at $76.49 a barrel.
ICE Brent November crude rose 76 cents to settle at $78.87 a barrel.
The U.S. Dollar Index was down 0.90 percent at 79.289, against the Japanese yen, the dollar was down 0.12 percent at 84.25.
Earlier in Asia, Japan's Nikkei share average dropped 1 percent to end at 9,471.67 after initially climbing on the yen intervention talk. The MSCI index for Asia ex-Japan stocks was up 0.5 percent. - Reuters
U.S. stocks advanced in a broad rally that lifted Wall Street to a fourth consecutive week of gains. The benchmark Standard & Poor's 500 Index is now up 9.5 percent so far in September.
U.S. oil futures prices climbed above $76 a barrel and gold hit all-time highs above $1,300 an ounce as expectations mounted that the Fed will again pump billions of dollars into the economy to spur growth.
While data on U.S. durable goods orders and home sales were soft, stock traders latched on to a rise in business spending in August as the latest sign the recovery is on firmer ground.
Wall Street gained 2 percent and MSCI's all-country world equity index . rose 1.6 percent. Emerging markets lagged, rising 0.7 percent, according to MSCI.
U.S. Treasury debt and German Bund futures fell in volatile trading as the U.S. data supported a shift out of government bonds and into riskier assets.
Bonds have either gotten expensive or are not providing much of a return, said Jason Pride, director of investment strategy at Glenmede Investment and Wealth Management in Philadelphia, which oversees about $18 billion in assets.
"You're finally in a place now that it's not because the equity equation is so attractive that you do something, it's actually because the safe side of the equation is so unattractive that you do something," Pride said.
The Dow Jones industrial average closed up 197.84 points, or 1.86 percent, at 10,860.26. The Standard & Poor's 500 Index gained 23.84 points, or 2.12 percent, at 1,148.67. The Nasdaq Composite Index rose 54.14 points, or 2.33 percent, at 2,381.22.
The dollar tumbled against a basket of currencies to a low last seen in February on a stronger-than-expected rise in the German Ifo business climate index for September to its highest level in more than three years.
The euro was up 1.34 percent at $1.3489.
Expectations of further dollar weakness underpinned gold, as did inflation jitters on the prospect of another quantitative easing program by the Fed.
U.S. gold futures for December delivery hit a record $1,301.60 an ounce, and settled up $1.80 at $1,298.10.
"The U.S. Fed is obviously contemplating, and the market is expecting, some kind of statement on quantitative easing," said Deutsche Bank analyst Daniel Brebner. "The influx of new money in the system raises longer-term expectations for inflationary forces."
News of revived business spending drew investors away from safe-haven government debt after a week-long bond rally. U.S. traders cited talk of a very large asset allocation trade from bonds to equities.
The benchmark 10-year U.S. Treasury note fell 16/32, its yield rising to 2.61 percent.
U.S. crude oil futures rose sharply, helped by a sliding dollar and expectations the Fed would pump money into the economy.
U.S. crude for November delivery rose $1.31, or 1.74 percent, to settle at $76.49 a barrel.
ICE Brent November crude rose 76 cents to settle at $78.87 a barrel.
The U.S. Dollar Index was down 0.90 percent at 79.289, against the Japanese yen, the dollar was down 0.12 percent at 84.25.
Earlier in Asia, Japan's Nikkei share average dropped 1 percent to end at 9,471.67 after initially climbing on the yen intervention talk. The MSCI index for Asia ex-Japan stocks was up 0.5 percent. - Reuters
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