Stocks soar as Fed boost lingers – USA TODAY

Citing a stronger economy, the Fed announces a patient approach to rate hikes in 2015. Shartia Brantley reports Video provided by Reuters Newslook

Video Transcript

Automatically Generated Transcript (may not be 100% accurate)
00:01 The Fed gave investors an early Christmas get by emphasizing
00:05 up patient approach to raising rates at the economy continues to
00:09 improve. Fed chair Janet Yellen as. Progress in the changing maximum
00:14 employment and 2% inflation continues. At some point it will become
00:19 appropriate to begin reducing policy accommodation. But based on its current
00:25 outlook the committee churches that it can be patient in doing
00:30 so. Stocks rallied on the news of major market indices reversing
00:34 three days of losses. Worth columnist Jane fat. China just your
00:39 financial market straightforward race. On. Equity should lobbyists and even how
00:45 you’ll incredible benefit because the pace is not going to be
00:48 crashing those markets on purpose any times in. Emerging markets are
00:53 huge and at issue are really good news that. And any
00:56 rate rise will be dependent on incoming economic data. Oatmeal financials
01:01 John can Ollie. It really does depend on the data and
01:04 the Fed’s stress that again that that they said what they’re
01:06 going to do is dependent on the data how quickly the
01:10 labor market improves. For now investors expect a gradual increase in
01:14 interest rates starting in mid 2015. And today’s rally says the
01:19 market is just fine with back.

Stocks are jumping Thursday as global markets advance and as investors’ good feelings about the Fed’s Wednesday announcement regarding interest rates are carrying over into a second day.

As of 12:04 p.m. ET, the Dow Jones industrial average, S&P 500 and Nasdaq composite are up about 1.5% each. The blue-chip Dow’s gain is about 250 points.

“Fed-induced optimism sent the Dow to its best day of the year yesterday, and the blue-chip barometer is set to pick up right where it left off,” Karee Venema of Schaeffer’s Investment Research noted early in the day.

Investment Roundtable takeaway: More volatility in 2015 http://t.co/mFSqxaz4yo#marketoutlook15pic.twitter.com/2FvMDjUJBR

— USA TODAY Money (@USATODAYmoney) December 18, 2014

Europe benchmarks are vaulting even higher, with the CAC 40 of France up a whopping 3.4%.

The good market news comes in the wake of volatility churned in recent days by a plunging Russian ruble and cratering oil prices. The ruble has stabilized somewhat, now trading for about 60 to one U.S. dollar. Oil has found a floor, at least for now: A barrel of West Texas intermediate crude is up slightly at a few cents above $58.

Remarks by Russian President Vladimir Putin in a long, three-hour news conference led the ruble to a 2.3% drop — modest compared to a huge, 23% plunge on Tuesday.

The surprising thaw in U.S.-Cuba relations announced by President Obama on Wednesday is having a two-day impact on the Herzfeld Caribbean Basin Fund, which invests in business related to the Caribbean island. The fund — ticker, CUBA — is up about 5% after having soared 28.9% the previous session.

Wednesday and Thursday’s market action shows that after a brief bout of turbulence, a risk-on mentality has returned to financial markets largely due to the Fed.

Obama: I had blunt discussion with Raul Castro; @djusatoday reports http://t.co/kAbl1Oxp2m

— USA TODAY Money (@USATODAYmoney) December 18, 2014

In an afternoon statement Wednesday, the Federal Reserve signaled that it could raise near-zero short-term interest rates within months amid an accelerating economy despite low inflation that has been subdued by falling oil prices. In its final policy statement of the year, the Fed said that it “can be patient in beginning to normalize the stance of monetary policy.”

Stocks took a giant leap on the resulting perception that the Fed won’t rush into rate hikes. The Dow had its best day of 2014, closing the day up 288 points, or 1.7%, to 17,356.87.

In Asia, Japan’s Nikkei 225 index gained 2% and Hong Kong’s Hang Seng index gained 1%. The Shanghai composite fell 0.1%.

Following the fallout of the slide in the Russian ruble, which has lost more than half of its value in recent months, Switzerland sought Thursday to prevent the Swiss franc from breaching upper limits imposed on the currency by introducing negative interest rates on commercial bank deposits.

Contributing: Paul Davidson, Jane Onyanga-Omara, Associated Press.

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