Traders failed to draw any sense of relief with Federal Reserve Chair Janet Yellen clarification of a few of the uncertainty surrounding the outlook for interest rates.
Advertisement
USA stocks lost the bulk of their steam on Friday, ensuring weekly losses, as biotechnology shares tumbled. Investors were encouraged by a report that showed US economic growth was faster in the spring than previously estimated.
The broader Standard & Poor’s 500 rose 17.88, or 0.8%, while the tech-heavy Nasdaq was up more than 1%, or 49.93 points. The Dow Jones industrial average was up less than 1 percent, while the two other major United States indexes were either flat or down slightly for the day, despite the renewed vote of confidence in the USA economy from Yellen and the central bank.
SPORTSWEAR SPURT: Nike soared after the company’s earnings surpassed analysts’ expectations.
The revised-up GDP data was mainly boosted by stronger consumer spending and construction.
For the week, the Dow fell 0.4 percent, and the S&P 500 dropped 1.4 percent, while the Nasdaq tumbled 2.9 percent.
The data supported the case that the USA economy may be gaining enough strength to withstand a rate hike.
Equity markets worldwide have tilted lower since the Fed last week flagged concerns about global economic conditions as reason to hold off on raising its benchmark interest rate for the first time in almost a decade.
Much of the recent price weakness is due to special factors such as a strong dollar and low oil prices, which are likely to fade, Yellen said, allowing U.S. inflation to rise to a 2-percent goal over the next few years.
For the first half of this year, the economy grew at a 2.25% annualized rate. She also added that it is important to begin rate increases before too long because of the “substantial lag” with which monetary policy decisions affect economic activity and inflation.
European markets rebounded Friday, ahead of the announcement of a new CEO at scandal-hit Volkswagen.
USA government bond prices fell. The yield on the benchmark 10-year Treasury note rose to 2.18 percent from 2.13 percent late Thursday.
ASIA’S DAY: Japan’s Nikkei 225 finished up 1.8 percent.
It pushed to 120.49 yen and to US$1.5190 per pound.
Advertisement
On the Comex division of the New York Mercantile Exchange, gold futures for December delivery were down 0.72% at $1,145.50.
