Breaking News Bar
updated: 3/6/2013 7:26 AM

Markets keep rising after Dow hits record high

hello
Success - Article sent! close
  • An investor looks at the stock bulletin board at a private securities company on Wednesday.

      An investor looks at the stock bulletin board at a private securities company on Wednesday.
    Associated Press

 
Associated Press

LONDON -- The Dow's new all-time high and better economic data from the United States propelled world markets Wednesday, with European stocks hitting a four-year high.

Investors are cheered by major central banks' commitments to keep supporting growth in the world biggest economies -- the U.S., China, the 17-country eurozone, Japan and Britain.

That has helped them look past a budget impasse in Washington. Automatic government budget cuts took effect last week after President Barack Obama and Congress failed to reach a budget deal. The $85 billion in cuts are expected to hurt U.S. economic growth, but for now investors seem happy to buy further into the market rally.

European shares added to gains reaped a day earlier, when the Dow posted a new record. Britain's FTSE 100 rose 0.1 percent to 6,439.54 while Germany's DAX advanced 1 percent to 7,950.84. France's CAC-40 added 0.3 percent to 3,798.65.

A broader measure of European stocks, the Stoxx Europe 600, rose to its highest level since June 2008.

Wall Street also showed no signs of slowing, with Dow Jones industrial futures rising 0.4 percent to 14,284 and the broader S&P 500 futures up 0.4 percent to 1,542.50.

Japan's benchmark index reached a multi-year closing high, capping a day of positive trade in Asia. The Nikkei 225 jumped 2.1 percent to close at 11,932.27, the highest finish since September 2008.

Hong Kong's Hang Seng added 1 percent to 22,777.84. South Korea's Kospi rose 0.2 percent to 2,020.74. Australia's S&P/ASX 200 advanced 0.8 percent to 5,116.80. Benchmarks in Singapore, Taiwan, Indonesia and mainland China rose.

Ric Spooner, chief market analyst at CMC Markets, said the new highs reached on Wall Street provided a psychological boost to investors but that such gains can go into reverse pretty quickly.

"From the big picture point of view, there is a lot of risk in either direction for the stock market at the moment," he said. "But we could quite easily continue rising, given how low interest rates are."

Federal Reserve chairman Ben Bernanke has recently suggested that the central bank would continue its campaign of massive bond-buying, known as "quantitative easing," to support the world's biggest economy. The issuance of bonds has pushed their prices down, steering investors toward stocks.

"The lesson is clear. Don't bet on Capitol Hill. Bet on Fed Chairman Ben Bernanke instead. To be sure, it was Bernanke's reassurance, as last week's congressional testimonies on monetary policy, to keep QE3 on its present course that turned a worried stock market into a record high," said analysts at DBS Bank Ltd. in Singapore.

Meanwhile, Japan's central bank is expected to sharply loosen its monetary policy to get the economy growth after two decades of stagnation. Chinese authorities have committed themselves to their economic growth target, while the European Central Bank is expected to leave interest rates at record lows for the foreseeable future.

In commodity markets, the benchmark oil contract for April delivery was down 26 cents to $90.56 per barrel in electronic trading on the New York Mercantile Exchange. The contract rose 70 cents on Tuesday, hours after the death of Venezuelan President Hugo Chavez, whose country sits on the world's second-largest oil reserves, after Saudi Arabia.

In currencies, the euro shed 0.2 percent against the dollar, to $1.3030, while the dollar rose 0.1 percent against the Japanese yen, to 93.42 yen.

Share

Interested in reusing this article?

Custom reprints are a powerful and strategic way to share your article with customers, employees and prospects.

The YGS Group provides digital and printed reprint services for Daily Herald. Complete the form to the right and a reprint consultant will contact you to discuss how you can reuse this article.

Need more information about reprints? Visit our Reprints Section for more details.

Contact information ( * required )

Name * Company Telephone * E-mail *

Message (optional)

Success - Reprint request sent Click to close
Comments ()
Guidelines: Keep it civil and on topic; no profanity, vulgarity, slurs or personal attacks. People who harass others or joke about tragedies will be blocked. If a comment violates these standards or our terms of service, click the X in the upper right corner of the comment box. To find our more, read our FAQ.
    help here