Stocks extended gains, with the Nasdaq briefly gaining one per cent and the S&P near session highs as weaker-than-expected economic data kept afloat the belief stimulus measures by central banks will likely continue.
Reuters reports that the Dow Jones industrial average rose by 78.23 points, or 0.51 per cent, to 15,381.03. The Standard & Poor’s 500 Index gained 10.91 points, or 0.66 per cent, to 1,659.27. The Nasdaq Composite Index climbed by 32.14 points, or 0.93 per cent, to 3,499.66.
At the close of trading on Wednesday, stocks fell around the world, as signs of strength in the United States economy fanned fears that the Federal Reserve might soon begin tapering its massive stimulus program, and battered safe-US debt rose on a revived bid after yields hit 13-month highs.
The dollar retreated broadly as US Treasury yields eased from multi-month highs, though investors said the greenback’s upward trend remained intact. Crude oil fell while gold rose.
On Wall Street the slide was led by stocks that pay high dividends in industries such as consumer staples, healthcare, telecommunications and utilities. The gains in US Treasury yields have made them more competitive with dividend-paying stocks.
Investors also worried that less monetary support from the Fed could result in weaker economic growth.
“The recent rise in interest rates on the 10-year bond over the past few sessions has finally caught up with some of this year’s market leaders,” said Michael Sheldon, chief market strategist for RDM Financial in Westport, Connecticut, adding that investors were cashing in profits.
Some strategists, however, were not alarmed by the selling.
“The stock market is up by 18 per cent year-to-date and we’re not even half-way through the year. In that context, this hardly qualifies as a down day,” said Doug Cote, chief market strategist with ING US Investment Management.
The Dow Jones industrial average dropped by 105.59 points, or 0.69 per cent, to end unofficially at 15,302.80. The Standard & Poor’s 500 Index lost 11.69 points, or 0.70 per cent, to finish unofficially at 1,648.87.
The Nasdaq Composite Index fell by 21.37 points, or 0.61 per cent, to close unofficially at 3,467.52.
In Europe, shares also fell on the worries about the Fed scaling back on stimulus. The FTSE Eurofirst 300 index of top shares dropped by 1.84 per cent
MSCI’s all-country world equity index fell by 0.57 per cent.