NEW YORK, July 30 — US stocks gained further and the US dollar fell yesterday as investors reacted to the Federal Reserve’s decision to keep interest rates at ultra-low levels.
The Fed repeated a pledge to use its “full range of tools” to support the US economy and keep interest rates near zero for as long as it takes to recover from the fallout from the coronavirus outbreak.
“We have seen some signs in recent weeks that the increase in virus cases and the renewed measures to control it are starting to weigh on economic activity,” Fed Chair Jerome Powell told a news conference.
Stan Shipley, a macro research analyst with Evercore ISI in New York, said the Fed’s accommodative reaction to economic conditions was “pretty much as expected,” given all it has done already.
Investors must now watch to see if Congress will agree on how to continue its own support for the economy. US President Donald Trump said yesterday that his administration and Democrats in Congress were still “far apart” on a new coronavirus relief bill.
MSCI’s gauge of stocks across the globe gained 0.84 per cent following slight losses in Europe and broader declines in Asia.
Wall Street trading ended yesterday broadly positive, as the Dow Jones Industrial Average rose 160.29 points, or 0.61 per cent, to 26,539.57; the S&P 500 gained 40.01 points, or 1.24 per cent, to 3,258.45; and the Nasdaq Composite added 140.85 points, or 1.35 per cent, to 10,542.94.
Among US stocks to advance were Starbucks Corp, which saw its business “steadily recovering,” and Advanced Micro Devices, which surged after it raised its revenue forecast. Boeing shares fell after a bigger-than-expected loss.
Deaths from the novel coronavirus in the United States registered their biggest one-day increase since May on Tuesday, with this month’s spike in infections forcing some states to make a U-turn on reopening their economies.
Asia and Europe have also been hit by new surges in infections, with several countries imposing new restrictions and Britain imposing 14-day quarantines on travellers from Spain.
Traditional safe haven assets were mixed.
After a pause, the price of gold resumed its climb and added 0.4 per cent to hit US$1,966.80 (RM8,345.13) an ounce.
Benchmark US Treasury 10-year notes rose 3/32 in price to yield 0.5724 per cent, from 0.581 per cent late on Tuesday.
The dollar index fell 0.45 per cent on inflation fears, among other factors, and the euro rose 0.56 per cent to US$1.178.
Oil prices climbed after a surprise drop in US crude inventories was enough to offset concerns about US fuel demand, though concerns about the record increases in Covid-19 infections kept gains in check.
US crude rose 0.56 per cent to US$41.27 per barrel and Brent was at US$43.77, up 1.27 per cent on the day. — Reuters
