USA stock indexes opened lower on Friday but were poised to end the week higher after a three-day rally spurred by optimism that the Federal Reserve will hold off from raising interest rates in the near term.
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With their high dividends, real estate stocks did well as investors seeking income looked beyond bonds, whose yields have been falling.
Turning to USA markets, the Dow Jones industrial average and S&P were both down 0.5 percent, while the dollar softened 0.3 percent to $1.1238 against the euro.
Telecommunications stocks, which also carry a higher-than-average dividend, also rose more than the rest of the market.
Gold touched a two-year high in July around $1,380 an ounce and year to date the metal is up more than 25% or $280 an ounce, one of its best annual performances since 1980. Copper miner Freeport-McMoRan rose 4 percent.
Trading followed a pattern that has become familiar in the last several months. The energy index surged 1.03 percent and was the top gainer among the 11 major S&P indexes.
Interestingly, the recent selloff prompted Goldman Sachs to pump the brakes on all the skepticism, reminding investors in a research note last week that there is at least one sector of the economy that could see a big earnings upside when the Fed does finally move to raise rates: banks. “So when the Fed said no rate hike’; the data does not support it, you saw a knee-jerk rally that the Fed got it right for once”.
Longer-dated Treasuries were on course for their biggest weekly advance since July as markets readjusted their view to a slower pace of interest-rate increases from the Federal Reserve. Investors should also remember that the statement was hawkish as near-term risks became balanced, the Fed explicitly said that the case for a hike had strengthened, and the voting showed that there is a growing rebellion to raise interest rates.
The Fed’s decision to keep rates low also caused bond prices to rise and the US dollar to fall against other major currencies, which in turn helped boost prices of commodities, which are denominated in dollars.
The Fed, meanwhile, has forecast 1.8 per cent growth in 2016 and two per cent over the next two years.
The Nasdaq Composite was up 32.08 points, or 0.61 percent, at 5,327.26, after rising as much as 0.76 percent to a record of 5335.82.
Oil prices were slightly lower, following two sessions of strong rises, on caution ahead of a gathering of OPEC ministers next week in Algeria to discuss possible production cooperation to rein in global oversupply.
CURRENCIES: The dollar climbed to 101.10 yen from 100.84 yen in late trading Thursday.
In late NY trading on Thursday, the euro rose to $1.1206 from $1.1173 of the previous session, and the British pound rose to $1.3072 from $1.2998, Xinhua news agency reported.
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