Friday, 19 October, 2018

Wall Street surges with some help from Apple, Cisco and tech stocks

Wall Street surges with some help from Apple, Cisco and tech stocks Wall Street surges with some help from Apple, Cisco and tech stocks
Nellie Chapman | 16 February, 2018, 03:46

- Global stocks turned lower on Wednesday after USA inflation data came in higher than expected, rekindling the fears of interest rate increases that had contributed to last week's precipitous drops.

In small-caps, the Russell 2000 Index closed at 1,522.16 for a gain of 27.21 points or 1.82%.

Facebook (FB.O) jumped 3.7 percent while Amazon.com (AMZN.O) and Apple (AAPL.O) both rose more than 1.8 percent.

Meanwhile, Australian stocks jumped 1.15 percent.

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"FAANG is still working".

"We've shaken out a lot of people who are anxious".

"There is still a fear of missing out".

The S&P 500 has now surged about 5 percent since last Thursday, but is still 5.5 percent below its record high on January 26.

Germany's DAX was basically flat, up 0.06 per cent at 12,346.17.

The yield on the 10-year Treasury note rose to 2.91 percent.

Fears that the long run of exceptionally low inflation is ending, prompting the Federal Reserve to pick up the pace of interest rate increases in 2018, triggered a global stock swoon earlier this month.

The gains suggest Wall Street is beginning to regain confidence after a major selloff earlier this month briefly sent major indices down more than 10 per cent which is considered correction territory.

"The CPI shows there is some inflation, but it was not through the roof", said Bruce Bittles, chief investment strategist at Robert W. Baird & Co in Nashville.

On the NY foreign exchange market, traders sold the United States dollar and bought the Japanese yen as a safe asset. They spiked in the first two weeks of February as stock indexes took some wild swings.

Likewise, a slowdown in consumer spending would ease the upward pressure on inflation that would ultimately result in lower bond yields and a go-slow Fed. Dow Jones Industrial Average (DJI) futures are trading over 300 points below fair value, while S&P 500 Index (SPX) and Nasdaq-100 Index (NDX) futures are also sharply lower. This on its own will add 0.2/0.3 percentage points to annual core inflation with medical care costs and housing costs pushing inflation higher too,"Knightley added".

USA stocks shook off an early decline and are mostly higher in midday trading, led by gains in banks.

The VIX slipping below 20 is "a very good sign", said Bucky Hellwig, senior vice president at BB&T Wealth Management. The consumer price index rose 0.5 percent in January, beating forecasts of a 0.3 percent increase - triggering a sharp reaction from domestic markets and from overseas. (NYSE:CMG) stock is up almost 11% in electronic trading, after the company announced it was appointing Taco Bell CEO Brian Niccol as its new chief executive.

Advancing issues outnumbered decliners on the NYSE by 1,398 to 1,381.