U.S. Stocks Close at Fresh Records
New York (Nov 22) The Dow Jones Industrial Average and the S&P 500 rose to record highs Friday after China’s central bank cut interest rates and the European Central Bank’s president reiterated that the institution was ready to expand its stimulus program.
Even as the moves underscore the willingness of central banks to fight slowing global growth with easy monetary policy, investors remain hesitant. U.S. stocks pared their earlier gains as investors digested what these central bank actions mean about the health of the global economy, traders said.
In a surprise move, China cuts interest rates for the first time in more than two years. WSJ's Emma Moody has the details on the News Hub with Simon Constable. Photo: Getty
“It’s short-term good news, but the really good news is going to take longer to play out,” said Tom Kolefas, a portfolio manager with TIAA-CREF, which manages $840 billion. “What we really need is real economic growth (outside the U.S.).”
The Dow rose 91.06 points, or 0.5%, to 17801.06 and the S&P 500 index advanced 10.75 points, or 0.5%, to 2063.50, on Friday. The Nasdaq Composite gained 11.10 points, or 0.2%, to 4712.97.
Early Friday, China’s central bank cut lending rates for the first time in more than two years in an attempt to bolster growth, a surprise move that drove currencies of commodity-exporting countries sharply higher in anticipation of more Chinese demand. The rate cut comes amid expectations that the world’s No. 2 economy could miss its annual growth target—set this year at about 7.5%—for the first time since the late 1990s.
Separately, European Central Bank President Mario Draghi said the central bank was ready to fight dangerously low inflation by expanding its asset-purchase program.
The central bank actions gave a lift to global commodity companies, which have been hurt so far this year by falling oil and metals prices. Materials companies in the S&P 500 were up 1.3%, making the sector the biggest gainer in the index.
Source: WSJ
