Reflections of people are seen in the windows of the Nasdaq offices in Times Square on June 24, 2016 in New York. US stocks tumbled early Friday, with banking equities suffering especially deep losses, joining an international rout after Britain's surprise vote to exit the European Union. The Dow sank more than 500 points shortly after the markets opened at 1330 GMT, but then quickly recovered some of the losses. The selloffs in the US were smaller than in many overseas markets. / AFP PHOTO / DON EMMERT
NEW YORK: The Nasdaq hit a record intraday high on Thursday amid broad gains in US stocks, a day after the Federal Reserve stood pat on interest rates.
While the risks to economic outlook were roughly “balanced”, the Fed maintained rates as inflation continued to run below its 2% target and members saw room for improvement in the labor market.
The central bank slowed the pace of future hikes and cut its longer run interest rate forecast to 2.9% from 3%, but sent a strong signal for a move by the end of this year.
“The Fed probably appeared less hawkish than what the markets had expected,” said Ryan Larson, head of equity trading at RBC Global Asset Management in Chicago. “I think the market continues to be focused on the Fed pushing a hike for later as a good thing rather than bad.”
The consensus among economists is for a hike in December as the Fed’s November meeting comes right around the US Presidential elections.
The probability of a November hike stands at a modest 12.4%, and rises to 58.4% for December, according to the CME Group’s FedWatch tool.
The dollar index dropped 0.6% on Thursday, and was on track to mark the second straight day of losses after the central bank’s decision.
Oil prices rose about 1.8% as the dollar fell and US crude inventories recorded a surprise drop.
At 9:36am ET (1336 GMT), the Dow Jones Industrial Average was up 132.52 points, or 0.72%, at 18,426.22.
The S&P 500 was up 15.01 points, or 0.69 percent, at 2,178.13.
The Nasdaq Composite was up 32.98 points, or 0.62%, at 5,328.22, after rising as much as 0.65% to a record of 5,329.92.
The S&P energy index surged 1.33% and was the top gainer among the 11 major sectors of the benchmark index.
Adding some support to the Fed’s plans for at least one hike this year was a report that showed the number of Americans applying for unemployment last week fell to a two-month low.
Shares of Apple rose 0.9% to US$114.56 and was the top influence on the S&P and the Nasdaq after Nomura and RBC raised their price targets.
Red Hat rose 6.7% to US$82.27 after the Linux operating system distributor reported second-quarter revenue and profit that beat market expectations.
One weak spot was Jabil Circuit, which dropped nearly 6% to US$22.34 after the contract electronics maker said it intended to realign its business at a cost of US$195mil over two years.
Advancing issues outnumbered decliners on the NYSE by 2,552 to 185. On the Nasdaq, 1,804 issues rose and 429 fell.
The S&P 500 index showed 26 new 52-week highs and no new lows, while the Nasdaq recorded 80 new highs and three new lows. - Reuters
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