Friday 9 December 2016

Stocks up, but all eyes now on the Fed

REUTERS

Published 16/09/2015 | 02:30

Traders work on the floor of the New York Stock Exchange. Photo: Reuters
Traders work on the floor of the New York Stock Exchange. Photo: Reuters

US stocks extended their gains in cautious trading on Tuesday after data showed retail sales continued to climb in August, strengthening the case for an interest rate increase when the Federal Reserve meets this week.

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Analysts said an interest rate hike - the first since 2006 -would remove the uncertainty that has dogged the market for several weeks.

"The debate around the Fed continues but the Fed will do more damage waiting for December to raise rather than start the normalization process," said Art Hogan, chief market strategist at Wunderlich Securities.

"If they don't raise rates this week, it's a bad signal."

Gains were capped by other data that showed US manufacturing continuing to struggle. Factory activity in New York state contracted in September for a second straight month.

Stocks have been volatile since China devalued its currency in August. The S&P 500 has had moves of at least 1pc in more than 10 sessions since August 20.

European shares also closed higher on Tuesday.

Volumes remained thin as investors were reluctant to make big bets before the Federal Reserve decides on Thursday whether to raise rates.

In Dublin, the ISEQ closed up just over 1pc at 6,470. Breadmaker Aryzta led the gains, up 4.34pc to €47.57 a share, while insurer FBD was also stronger at €6.20.

The pan-European FTSEurofirst 300 index was up 0.85pc at 1,405.49 points.

Europe's benchmark index is up more than 5pc from a low hit late last month, but still 14pc lower than the peak just two months ago, mainly on concerns about slow growth, especially in China.

Irish Independent

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