Thursday 27th July 2017 |
Text too small? |
Wall Street advanced to record highs amid better-than-expected corporate earnings including from Boeing while the Federal Reserve signalled it will begin unwinding its balance sheet “relatively soon.”
At the end of its two-day meeting, the Federal Open Market Committee kept its target interest rate steady, saying "near-term risks to the economic outlook appear roughly balanced” though it “is monitoring inflation developments closely.”
"The committee expects to begin implementing its balance sheet normalisation program relatively soon, provided that the economy evolves broadly as anticipated," the Fed said in a statement.
Wall Street rose. In 3.44pm trading in New York, the Dow Jones Industrial Average rose 0.4 percent, while the Nasdaq Composite Index added 0.1 percent. In 3.30pm trading, the Standard & Poor’s 500 Index inched 0.03 percent higher.
The Dow rose to a record 21,742.70, the S&P 500 touched a record 2,481.69, while the Nasdaq reached a record 6,432.38.
“I expect an announcement of the onset of the balance-sheet reduction at the conclusion of the September meeting, effective on the first of October,” Carl Tannenbaum, chief economist at Northern Trust in Chicago, told Bloomberg after Wednesday’s statement.
In the Dow, a rally in shares of Boeing, up 9 percent recently, led the index higher. Bucking the trend were shares of McDonald’s and those of Cisco, recently down 1.8 percent and 1.7 percent respectively, for the largest percentage declines in the Dow.
Boeing posted quarterly earnings that exceeded expectations and upgraded its full-year earnings outlook.
“Our teams are delivering better performance in every segment of the business, which is reflected in our strong second-quarter results and improved 2017 outlook,” Chief Executive Officer Dennis Muilenburg said in a statement. “Our robust cash flow enabled us to return more value to shareholders, invest in future growth and in our people, including a plan to accelerate pension funding that also reduces risk and cyclicality in our business.”
Shares of Coca-Cola rose, up 1 percent as of 2.51pm in New York, after the company posted quarterly profit that bettered analysts expectations, bolstered by low- and no-calorie sparkling soft drinks as well as non-carbonated beverages.
“Not only did we see strong performance during the quarter in rapidly expanding areas of our company, such as our innocent juice and smoothie business in Europe, our organic revenue growth in sparkling soft drinks was led by innovation in and marketing support for our low- and no-sugar options like Coca-Cola Zero Sugar, which continues to roll out around the world,” James Quincey, chief executive officer, said in a statement.
“Our performance gives us confidence that we will achieve our full year financial objectives even in the face of challenging conditions, and also demonstrates further success in evolving our portfolio to meet changing consumer tastes and preferences,” Quincey noted.
In the latest US economic data, a Commerce Department report showed new home sales rose 0.8 percent to a seasonally adjusted annual rate of 610,000 units in June. However, it also showed a downwardly-revised sales pace for each of the three months prior to June.
"We need the housing market to be strong if the economy is to accelerate," Joel Naroff, chief economist at Naroff Economic Advisors in Holland, Pennsylvania, told Reuters. "The housing market has been wandering around for most of 2017 and it isn't clear if that pattern will change anytime soon."
In Europe, the Stoxx 600 Index finished the day with an increase of 0.5 percent from the previous close. The UK’s FTSE 100 Index rose 0.2 percent, Germany’s DAX Index gained 0.3 percent, while France’s CAC 40 Index climbed 0.6 percent.
(BusinessDesk)
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