While you were sleeping: Fed minutes offer relief
Oct. 9 (BusinessDesk) - Wall Street moved higher, bolstered by the minutes of the September Federal Reserve meeting, as
investors geared up for a fresh US earnings season.
Alcoa is set to report its latest results after the market close, with a flood of reports to follow next week.
“This particular earnings season will be a period for most companies to really start talking about next year,” Eric
Schoenstein, Portland, Oregon-based co-manager of the US$4.9 billion Jensen Quality Growth Fund, told Bloomberg. "That
could be a way to provide some direction. We need some transparency to clear up the confusion around where the economy
is headed, where companies are headed.”
Equity investors found relief on Thursday in the minutes from the latest Federal Open Market Committee meeting, which
firmed expectations policy makers will persist in their efforts to stoke economic growth. The US dollar weakened,
Policy makers “agreed that developments over the intermeeting period had not materially altered the Committee's economic
outlook,” according to newly-released minutes of the September 16-17 meeting. “Nevertheless, in part because of the
risks to the outlook for economic activity and inflation, the Committee decided that it was prudent to wait for
additional information confirming that the economic outlook had not deteriorated and bolstering members' confidence that
inflation would gradually move up toward 2 percent over the medium term.”
Wall Street found fresh momentum in the minutes. In New York trading at about 2.47pm, the Dow Jones industrial average
added 0.5 percent, the Standard & Poor’s 500 Index rose 0.4 percent. The Nasdaq Composite Index pared losses to 0.2 percent. All three benchmarks were
lower earlier in the session.
“Participants anticipated that recent global developments would likely put further downward pressure on inflation in the
near term; compared with their previous forecasts, more now saw the risks to inflation as tilted to the downside,” the
“But participants still expected that, as the labour market continued to improve and the transitory effects of declines
in energy and non-oil import prices dissipated, inflation would rise gradually toward 2 percent over the medium term.”
A Labor Department report on Thursday showed that initial claims for state unemployment benefits declined 13,000 to a
seasonally adjusted 263,000 for the week ended October 3.
Gains in shares of Caterpillar and those of Nike, last up 2.2 percent and 1.9 percent respectively, led the Dow higher.
Shares of Apple, however, posted the largest percentage drop in the Dow, recently trading 1.3 percent weaker.
Oil also gained, buoyed by a rise in Chinese stocks as the market reopened after a week-long holiday.
In Europe, the Stoxx 600 Index ended the day with a 0.2 percent advance from the previous close. Germany’s DAX Index and
France’s CAC 40 Index also each added 0.2 percent, while the UK’s FTSE 100 Index rose 0.6 percent.