5.8 C
London
Monday, December 5, 2022
HomeNewsMarketingWall Street stocks edge higher after US GDP rebounds

Wall Street stocks edge higher after US GDP rebounds

Date:

Related stories

Biocon Biologics promotes Shreehas Tambe to MD and CEO 

Biocon Biologics, a subsidiary of Biocon has announced...

Top Republicans slam Trump’s call to ‘terminate’ the Constitution

Former President Donald Trump faced rebuke Sunday from...

Eurozone service sector contracts for 5th month in November

Eurozone service sector contracts for 5th month in...

Services PMI rose to 56.4 in November, quickest expansion in 3 months

Following manufacturing, the services sector too showed a...
spot_imgspot_img


US stocks advanced on Thursday after a fresh GDP report showed that the world’s largest economy rebounded in the third quarter.

Wall Street’s S&P 500 added 0.4 per cent in early New York trading, while the technology-heavy Nasdaq 100 gained 0.2 per cent.

Those moves came after data showed the US economy expanded in the third quarter after contracting for the first six months of the year, with gross domestic product increasing 2.6 per cent on an annualised basis between July and September. Economists polled by Reuters had forecast an increase of 2.4 per cent.

GDP had dropped 0.6 per cent in the second quarter of 2022, and 1.6 per cent in the first three months of the year.

The Federal Reserve has raised interest rates aggressively this year in an attempt to curb inflation, with extra-large increases of 0.75 percentage points at each of its past three meetings — taking its target range to 3 to 3.25 per cent. Concerns have intensified in recent months that the US central bank and its international peers will turn the screws on monetary policy into a protracted slowdown.

Investors have been watching the latest flurry of quarterly corporate earnings closely for signs of strain from rapid price growth and rising borrowing costs, against an increasingly challenging economic backdrop.

Shares in Facebook owner Meta tumbled more than 20 per cent on Thursday after the company reported another quarter of declining revenues, joining other Big Tech groups in warning that an economic slowdown was hitting its advertising businesses.

That decline came following smaller share price falls for Google parent Alphabet and Microsoft in the previous session after weak third-quarter results.

In Europe, shares were subdued after the European Central Bank raised interest rates by 0.75 percentage points in its latest effort to tackle inflation.

The regional Stoxx Europe 600 index was flat by mid-afternoon in London, trimming an earlier decline.

The ECB governing council’s decision to raise borrowing costs by 0.75 percentage points for the second meeting in a row pushed the deposit rate to 1.5 per cent, the highest level since 2009.

Inflation in the euro area hit 9.9 per cent in the year to September while S&P Global’s flash eurozone composite purchasing managers’ index, a key gauge of business conditions for the manufacturing and services sector, indicated business activity in the eurozone this month suffered its biggest contraction for almost two years.

Luca Paolini, chief strategist at Pictet Asset Management, said the ECB could be tempted to slow the pace of increases in December if the Fed follows a similar path, even though short-term inflationary pressures are greater in Europe than they are in the US.

“Falling natural gas prices give the ECB some justification for slowing the pace of tightening [later this year], and the bank would rather go big now to prove it’s serious about inflation,” said Paolini. “By December the main worry will not be inflation, but the decline in economic activity.”

In government bond markets, the yield on the benchmark 10-year US Treasury note slipped 0.03 percentage points to 3.99 per cent, reflecting rising prices. The yield on the equivalent German Bund fell 0.1 percentage point to 2.02 per cent. The Italian 10-year yield dropped by a more pronounced 0.14 percentage points to 4.3 per cent as the debt instrument’s price climbed.

The dollar strengthened 0.5 per cent against a basket of six peers, while sterling declined 0.3 per cent against the greenback to $1.159.

In Asian equity markets, Hong Kong’s Hang Seng added 0.7 per cent and Japan’s Topix was down 0.6 per cent.



Source link

Subscribe

- Never miss a story with notifications

- Gain full access to our premium content

- Browse free from up to 5 devices at once

Latest stories

spot_img

LEAVE A REPLY

Please enter your comment!
Please enter your name here