Traders work on the floor of the New York Stock Exchange (NYSE) in New York City, U.S., June 30, 2016. REUTERS/Brendan McDermid
NEW YORK: Wall Street rose in afternoon trading on Thursday after Bank of England (BoE) governor Mark Carney raised the prospect of an interest rate cut following Britain’s vote to leave the European Union.
Carney’s comments added more steam to a recovery rally after a two-day post-Brexit carnage that erased about US$3 trillion from global markets.
The three major US indexes - all up about 1% - have now recouped more than three-quarters of the losses suffered after the vote.
Carney said monetary policy easing would likely be required over the summer and that the BoE had measures in place to prop up the country’s economy and its vast banking sector.
“Central banks are doing their best to step in and send stocks higher,” said Adam Sarhan, chief executive officer of Sarhan Capital. “I think the Fed is more than ready to follow suit if market conditions worsen.”
Investors will keenly watch St Louis Fed President James Bullard’s speech on US monetary policy outlook for clues on the Fed’s take on policy easing. Bullard is scheduled to speak in London at 3:15pm ET (1915 GMT).
A rise in consumer staples stocks also provided a lift to US stocks. Hershey soared 15.7% to US$112.43 after reports that Mondelez had made a US$107 per share bid.
The jump made Hershey the top percentage gainer on the S&P, while Mondelez was up 2.4%.
All 10 major S&P sectors were higher, with the consumer staples index rising 1.45%.
At 12:19pm ET, the Dow Jones Industrial Average was up 167.31 points, or 0.95%, at 17,861.99, the S&P 500 was up 18.1 points, or 0.87%, at 2,088.87 and the Nasdaq Composite was up 39.73 points, or 0.83%, at 4,818.98.
Data showed the number of Americans filing for unemployment benefits rose last week to 268,000, but remained below a level associated with a healthy labour market.
The weekly data is a precursor to the more comprehensive monthly payrolls report due next week, which is expected to feed into the U.S. Federal Reserve’s decision on interest rate hikes this year.
Traders have priced in only a 13.4% chance of a hike as late as December, according to CME Group’s FedWatch tool.
General Electric rose 1.3% after Goldman Sachs raised its price target on the stock. The stock provided the biggest boost to both the S&P and the Dow.
Advancing issues outnumbered decliners on the NYSE by 2,117 to 835. On the Nasdaq, 1,884 issues rose and 832 fell.
The S&P 500 index showed 68 new 52-week highs and one new low, while the Nasdaq recorded 54 new highs and 22 new lows. - Reuters
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