NEW YORK – Global equity markets and the dollar rose on Friday, ending a rocky week on an upbeat note after Federal Reserve chairwoman Janet Yellen said the United States central bank was on track to raise interest rates this year and U.S. economic growth was revised upward again.
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In a lecture at the University of Massachusetts at Amherst, Yellen said she thought inflation would gradually move up to the Fed’s target rate of 2 percent as unusually low oil prices and other factors prove temporary.
The Standard and Poor’s 500 Index climbed 0.8 per cent to 1,947.51 in early afternoon trading after closing on Thursday at an almost three-week low.
The Dow Jones industrial average rose 150.56 points, or 0.93 percent, to 16,351.88. South Korea’s Kospi fell 0.2 percent to 1,942.85.
Analysts are recalibrating expectations on U.S. interest rate movements, and by extension movements in the USA dollar, after the Fed declined to raise rates at their September meeting.
Rounding out action on Comex Friday, December copper shed 1.9 cents, or 0.8%, to $2.284 US a pound, losing 4.3% on the week.
The economy grew at an annual rate of 3.9% in the April-June quarter, up from a previous estimate of 3.7%, the Commerce Department said.
The stock market has been volatile for the last six weeks on worries of slowing growth in China and other emerging markets, as well as uncertainty on interest rates. The data supports the case that the US economy may be gaining enough strength to withstand a rate increase. Volkswagen will reportedly bring in the head of its Porsche auto brand as new chief executive, as it fights the fallout from the United States vehicle emissions test scandal. However, the struggling transportation giant are suffering finance turmoils including cash flow problems, and its share prices had been continuously plunging since the beginning of this year. Profits after tax with inventory valuation and capital consumption adjustments showed a 2.6 percent rebound from a slump in late 2014 and early 2015, instead of the 1.3 percent increase reported last month.
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On currency markets, sterling was down slightly against the U.S. dollar at just under 1.52 and little changed against the euro at slightly above 1.35. Against the safe-haven Japanese yen, the dollar hit a two-week high of 121.12 yen, before edging down to 120.79, still up 0.6 percent on the day.
