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Asian stocks advance after worries over Fed rate hike ease

SEOUL, South Korea (AP) – World stocks advanced Tuesday after a Federal Reserve board member said there is no rush to raise interest rates, reassuring investors who were anxious that a rate hike could pull share prices lower. Technology companies also jumped. The Fed has indicated it is preparing for a second hike of 0.25 percentage point, although it has signaled the pace of future rate rises will be slower than in the past. The Shanghai Composite index inched back into positive territory, gaining 0.1 percent to 3,023.51.

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SINGAPORE/TOKYO, Sept 13 The dollar inched higher against the yen on Tuesday but remained below the previous day’s high, having taken a hit after dovish comments from a Federal Reserve policymaker reduced bets that the Fed would raise interest rates this month.

Goldman Sachs has trimmed the odds of the U.S. Federal Reserve raising interest rates next week, noting the absence of a clear indication that the central bank’s rate-setting group was set to tighten policy. Brainard indicated Monday, Sept. 12, 2016, that she’s in no hurry to raise interest rates again, comments that could be greeted with relief on Wall Street. They understandably have moved out the risk spectrum in response to very low rates, but they’ve not recalibrated their expectations for returns.

As investors sought safe-play picks, retail giant Wal-Mart rose $1.64, or 2.3 percent, to $71.94 and Procter & Gamble gained $2.01, or 2.3 percent, to $88.25.

The new assessment from Goldman came after Fed Governor Lael Brainard warned on Monday against moving too quickly on rate hikes.

Brainard is among the Fed’s top “doves” – officials who tend to think the central bank should be cautious about raising rates out of concern that higher rates could stifle borrowing, spending and growth. “What’s one quarter of one percent?” Potash shareholders will own a majority of stock in the new company. That division has more than 6,500 printing patents. HP rose 57 cents, or 4.1 percent, to $14.41.

Remember that as bond yields have fallen, liquidity has flowed into other higher-yielding and riskier instruments, such as low-volatility stocks. Elsewhere, Apple rose $1.34, or 1.3 percent, to $104.47 and Broadcom picked up $3.18, or 2 percent, to $163.93.

And the unemployment rate has dropped to a healthy 4.9 percent. Starboard called for changes to “reverse the trajectory of poor operating and financial performance” at Perrigo. Perrigo said it will review Starboard’s comments.

Brainard highlighted reasons to raise rates with caution: US inflation has been persistently below the target of 2 percent; labor market slack has been greater than anticipated; financial transmission from foreign market is strong and poses a risk; and the ability of monetary policy to respond to shocks is asymmetric. Brent crude, the benchmark for worldwide oil trading, climbed 25 cents to $48.26 a barrel in London. European indices in France, Germany and the United Kingdom fell by up to 2 per cent. On Friday a federal judge ruled that the company can build a $3.8 billion pipeline meant to carry oil from North Dakota to IL. That sent the company’s stock higher. But the federal government stepped in to temporarily stop part of the project, and several agencies said they will reconsider their decisions supporting it. The Standing Rock Sioux tribe wants to stop construction of the pipeline, which comes within a mile of a reservation in southern North Dakota.

By the close the Dow Jones had rallied 1.3% to 18,325. The contract added 41 cents on Monday.

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Gold fell $8.90 to $1,325.60 an ounce.

Brian Snyder  Reuters