Wednesday 2nd October 2013 |
Text too small? |
Stocks gained, while US Treasuries and gold fell, amid expectations that the US government's partial shutdown over lawmakers' failure to agree on a federal budget will be short-lived and the impact on the economy limited.
In late afternoon trading in New York, the Dow Jones Industrial Average rose 0.40 percent, the Standard & Poor's 500 Index climbed 0.76 percent, and the Nasdaq Composite Index jumped 1.01 percent.
"For the moment, the shutdown looks more like noise rather than something that makes a fundamental difference for growth," Nicola Marinelli, portfolio manager at Glendevon King in London, told Bloomberg News.
Expectations that the stalemate won't last diminished the appeal of safe-haven assets including gold and US Treasuries. Gold futures for December delivery dropped 3 percent on the Comex.
"While the standoff is not a great thing, the effects seem to be limited, and we are not seeing investors rush to gold for its safe-haven quality," Frank Lesh, a trader at FuturePath Trading in Chicago, told Bloomberg News. "Riskier assets like equities seem to be in favour."
US Treasuries fell, pushing yields on the 10-year note three basis points higher to 2.64 percent.
Gains in shares of Merck, last up 2.3 percent, led the Dow higher. The company announced plans to cut 8,500 jobs as part of a plan to generate savings of about US$2.5 billion by the end of 2015.
"These actions will make Merck a more competitive company, better positioned to drive innovation and to more effectively commercialise medicines and vaccines for the people who need them," Kenneth Frazier, Merck's chairman and chief executive officer, said in a statement.
"Today's announcement further underscores that we are committed to improving our performance in the short term while also investing for the long term to create value for patients, customers and shareholders," Frazier said.
In Europe, the Stoxx 600 Index ended the session with a 0.8 percent increase from the previous close. Germany's DAX rallied 1.1 percent, while France's CAC 40 gained 1.3 percent.
The UK's FTSE 100 finished nearly 0.1 percent weaker.
Markit Economics' euro-zone factory index was 51.1 in September, unchanged from the preliminary estimate.
"An improvement in euro-zone manufacturing business conditions for a third straight month in September sends a reassuring signal that the sector is providing an all-important lift for a region that has been besieged by recession," Chris Williamson, chief economist at Markit, said in a statement.
"Even manufacturers in the region's 'periphery' are reporting better demand for their goods."
BusinessDesk.co.nz
No comments yet
Second St John withdrawal of labour takes effect tomorrow with further strikes likely
Sanford Appoints Independent Director
CRP ADVISES CLOSURE OF SHARE OFFER TO EXISTING INVESTOR
Devon Funds Morning Note - 14 August 2024
OCR 5.25% - Monetary restraint tempered as inflation converges on target
Consumers still need due diligence as new deposit takers emerge.
Woolworths strike: staff asked to dress up in Disney costumes for a week on their own dollar
Turners Invests in Quashed Online Insurance Platform
PGW Reports on Challenging Year
Arvida Announces Executive Team Changes