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Global Markets Follow Wall St. Higher 05/15 04:56
World stocks were mostly higher on Wednesday after a rally on Wall Street
that took the Nasdaq composite index to a record high.
HONG KONG (AP) -- World stocks were mostly higher on Wednesday after a rally
on Wall Street that took the Nasdaq composite index to a record high.
A report Tuesday showed that prices remain stubbornly high at the wholesale
level in the United States, before many price changes are passed along to
consumers, with the producer price index reading for April reaching 0.5%,
higher than forecast.
The rate of inflation has been ticking higher in 2024, raising concerns that
the Federal Reserve could have a hard time taming inflation to its goal of 2%.
But investors were reassured by comments made by Fed Chair Jerome Powell.
Speaking at a panel discussion in Amsterdam on Tuesday, he reaffirmed that the
U.S. central bank won't likely raise its key interest rate to respond to
stubborn inflation. But he also said that his confidence that inflation will
ease is "not as high as it was" because price increases have been persistently
hot in the first three months of this year.
A bigger test for markets comes later Wednesday, when the U.S. will release
its monthly update on consumer prices, or inflation faced by households.
Economists expect the consumer price index to ease to 3.4% in April on a
year-over-year basis.
In the European market, Britain's FTSE 100 rose 0.5% and hit another record
high to 8,747.41 in early trading. Germany's DAX was up 0.2% to 18,755.96 and
the CAC 40 in Paris edged 0.1% higher to 8,229.78.
The futures for the S&P 500 and the Dow Jones Industrial Average both edged
down less than 0.1%.
In Asian trading, Tokyo's Nikkei 225 index climbed 0.1% to 38,385.73 and
Australia's S&P/ASX 200 advanced 0.4% to 7,753.70.
The Shanghai Composite index slipped 0.8% to 3,119.90 after the central bank
kept a key lending rate unchanged Wednesday, signaling Beijing's focus on
maintaining monetary stability.
Elsewhere, Taiwan's Taiex gained 0.8%. In Bangkok, the SET lost 0.6%.
Markets in South Korea and Hong Kong were closed for holidays.
On Tuesday, the S&P 500 index rose 0.5% and the Dow Jones Industrial Average
rose 0.3%.
The Nasdaq composite, which is heavily influenced by technology stocks,
jumped 0.8% to 16,511.18, its highest close ever. The tech sector has been a
driving force for much of the broader market's gains this year.
Several "meme" stocks, including GameStop and AMC Entertainment, raced
higher in a reprise of the social-media driven frenzy of three years ago.
GameStop jumped 60.1% and AMC rose 32%. Both stocks gave back much of their
gains from earlier in the day.
Bond yields edged lower. The yield on the 10-year Treasury slipped to 4.43%
Wednesday from 4.49% late Monday.
Investors have been curtailing their expectations for the speed and
frequency of interest rate cuts this year as inflation remains hotter than
expected. Traders are betting on one or two rate cuts this year, according to
data from CME Group.
Wall Street is still hoping the Fed can pull off its "soft landing," where
high interest rates work to cool inflation without slowing the economy into a
recession. The economy remains strong, but consumers might be showing signs of
fatigue under the weight of stubborn inflation. Economists expect a retail
sales report on Wednesday to show that consumer spending softened in April,
just as it has over the last several months.
In other trading, benchmark U.S. crude added 46 cents to $78.48 a barrel in
electronic trading on the New York Mercantile Exchange. Brent crude, the
international standard, rose 38 cents to $82.76 a barrel.
The U.S. dollar slipped to 156.10 Japanese yen from 156.42 yen. The euro
cost $1.0827, up from $1.0820.
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