Fed optimism sends Wall Street to fresh highs

Traders work on the floor of the New York Stock Exchange (NYSE) shortly after the opening bell in New York, US May 31, 2019. — Reuters pic
Traders work on the floor of the New York Stock Exchange (NYSE) shortly after the opening bell in New York, US May 31, 2019. — Reuters pic

NEW YORK, July 12 — Wall Street spiked to new records at the open today, as investors cheered the news an interest rate cut by the Federal Reserve is coming soon.

The gains put US stocks on track to notch modest gains for the second week in a row.

A half-hour into the day’s trading, the benchmark Dow Jones Industrial Average was up 0.5 per cent at 27,220.93, following the record close yesterday, led by gains in chemical maker Dow Inc and industrial conglomerate 3M.

The broader S&P 500 edged up 0.1 per cent to 3,004.17 and the tech-heavy Nasdaq gained 0.2 per cent to 8,212.00.

Federal Reserve Chairman Jerome Powell told Congress this week that persistent “crosscurrents” in the global economy posed a risk to the record US economic expansion, comments seen cementing the case for a rate cut at this month’s policy meeting.

“There’s not much more to matters right now than the rate-cut buzz,” analyst Patrick O’Hare wrote at Briefing.com.

Meanwhile, senior White House economic aide Peter Navarro told CNBC today that US trade negotiators were due to travel to China in “the very near future,” resuming talks that had verged on collapse two months ago.

Markets have been roiled since last year by a deepening trade war between the world’s top two economies, meaning hopes of a resolution should boost investor sentiment.

Ford Motor Co was up 1.8 per cent after announcing an expanded alliance with Volkswagen into include electric and self-driving autos.

Ford said it will use VW technology to market “at least one” high-volume fully electric vehicle to European consumers starting in 2023. — AFP

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