Wall Street stocks jumped Friday after Federal Reserve Chair Janet Yellen said she still expects to raise interest rates in 2015.
“Most FOMC (Federal Open Market Committee) participants, including myself, now anticipate that achieving these conditions will likely entail an initial increase in the federal funds rate later this year, followed by a gradual pace of tightening thereafter“, Dr Yellen said during a speech on Thursday in Massachusetts.
The broader Standard & Poor’s 500 rose 17.88, or 0.8%, while the tech-heavy Nasdaq was up more than 1%, or 49.93 points.
Nike soared after the company’s earnings surpassed analyst expectations.
In other sectors, Industrials advanced 1.66 percent when Bombardier, Canada’s biggest aircraft and railway maker spiked 8.9 percent to 1.59 Canadian dollars per share. Growth was supported by gains in construction and consumer spending.
“With warning lights about <strong>growthstrong> flashing and <strong>pricesstrong> falling at the fastest <strong>ratestrong> for at least six years, the survey data, there’s a strong argument for the <strong>Fedstrong> to hold off hiking <strong>interest ratesstrong>”.
In the latest interest rate announcement on September 9, the Canadian central bank also highlighted that a firm recovery in the USA economy, with particular strength in its sectors, which is important for Canadian exports. And she suggested that global economic weakness won’t likely be significant enough to dissuade the Fed from raising its key short-term rate from zero by December.
“The market is looking down the road at the other implications for what rising rates means in the USA, ” Mortimer said, including their impact on the dollar and exports.
Automakers in Europe are still suffering in the wake of Volkswagen’s emissions scandal. Iron ore heavyweights Rio Tinto PLC (RIO) (RIO) (RIO) and BHP Billiton PLC (BLT.LN) (BHP.AU) (BHP.AU) finished higher by 1.4% and 0.7%, respectively. The dollar was up 0.37 percent against the yen at 120.550 yen. Profits after tax with inventory valuation and capital consumption adjustments showed a 2.6 percent rebound from a slump in late 2014 and early 2015, instead of the 1.3 percent increase reported last month.
The yield on the USA 10-year Treasury note rose 15/32 in price to yield 2.1729 percent, while gold fell from one-month highs after Yellen’s speech and on the strong dollar.