Traders work on the floor of the New York Stock Exchange. — Reuters pic
NEW YORK, June 15 ― The S&P 500 edged up and the Nasdaq reached another record closing high yesterday after the European Central Bank said it would avoid raising interest rates until mid-2019, and data showed US economic strength.
The strong US retail sales numbers came a day after the US Federal Reserve increased its key interest rate and hinted at the possibility of two more hikes by the end of 2018.
The ECB announced it would end its bond-purchase programme at year-end but signalled that any interest rate hike was still distant.
“People are looking at potential tightening on the part of the ECB and realising it may not come to fruition,” said Stephen Massocca, senior vice president at Wedbush Securities in San Francisco. “I think people saw that today and thought that was positive news.”
The Fed’s rate hike on Wednesday was accompanied by an upbeat economic assessment. This was followed by yesterday’s better-than-expected retail sales data and unemployment rolls falling to a near 44-1/2 year low, underscoring the central bank’s optimism.
“(The Fed’s) ability to raise rates more, three or four times, that’s actually good news,” said Doug Cote, chief market strategist at Voya Investment Management in New York. “The reason they’re able to do it is the economy’s so strong.”
The stronger-than-expected retail sales data “smashed expectations,” Cote said. “So that’s good news on top of good news and that’s really what’s driving markets today.”
The Dow Jones Industrial Average fell 25.89 points, or 0.1 per cent, to 25,175.31, the S&P 500 gained 6.86 points, or 0.25 per cent, to 2,782.49 and the Nasdaq Composite added 65.34 points, or 0.85 per cent, to 7,761.04.
Of the 11 major sectors of the S&P