United States equities rose again overnight, leaving Standard & Poor’s 500 Index above 1400 for the first time in almost four years.
In more signs that the US economy is undergoing a steady, broad-based recovery, manufacturing in New York and the mid-Atlantic region has increased, Bloomberg’s consumer confidence index has risen to its highest level since 2008, dividends increased and jobless claims have declined to a four-year low.
On the New York Stock Exchange, the Dow Jones Industrial Average rose 0.44%, or 58.66 points, to 13252.80. The widely-followed indicator is up 8.67% this year.
The S&P500 Index was up 0.60%, or 8.32 points, to 1402.60.
The NASDAQ rose 0.51% to 3056.37, adding to gains made yesterday.
“The economy is doing better than people thought. The corporate sector has remained very profitable,” says Russ Koesterich, the chief investment strategist for the world’s largest asset manager, the IShares unit of BlackRock, which oversees $US3.51 trillion in assets.
“Valuations are reasonable. The buying is justified,” Koesterich told Bloomberg.
West Texas Intermediate (WTI) oil fell for the third day out of four as reports surfaced US President Barack Obama discussed the release of the Strategic Petroleum Reserve with UK Prime Minister David Cameron. Oil fell 0.02% to $US105.41 a barrel.
Gold rose 0.92%, recovering slightly from a big fall yesterday to trade at $US1658.00 an ounce.
One Australian dollar was buying $US1.0525 at 8.24am AEST after recovering with the good economic news.
The Stoxx Europe 600 grew to its highest level in almost a year as solid economic news from the world’s biggest pool of consumers, the United States, flowed across the Atlantic.
“We’re getting some positive economic news from the US,” Mike Lenhoff, chief strategist at Brewin Dolphin Securities, told Bloomberg.
London’s FTSE 100 closed flat again overnight, down 0.08% to 5940.72.
The German DAX was up 0.92% or 65.03 points to 7144.45.
The European blue chip Stoxx50 index was also up 0.74% or 19.18 points to 2593.97.
European problems masked by good news in the US
The good news in the US does not change the fact the European ship still listing under heavy debt and high unemployment. Italy’s national statistics institute confirmed last week the country had fallen into recession late last year, contracting by 0.7% from output in the previous three-month period. More.
Ten-year borrowing costs for Italy and Spain have dropped below a sustainable 5%, but Portugal’s 10-year bonds would yield more than 13%, according to an article by Bloomberg.