Wall Street rallies after Powell says policy rate near neutral
By Amy Caren Daniel (Reuters) - U.S. stock indexes rallied more than 1.5 percent on Wednesday after Federal Reserve Chairman Jerome Powell said the policy rate was 'just below' neutral, easing worries of a faster pace of interest rate hikes next year. The Fed's gradual interest-rate hikes are meant to balance risks as it tries to keep the economy on track, Powell said, but offered few clues on how much longer the U.S.
By Amy Caren Daniel
(Reuters) - U.S. stock indexes rallied more than 1.5 percent on Wednesday after Federal Reserve Chairman Jerome Powell said the policy rate was 'just below' neutral, easing worries of a faster pace of interest rate hikes next year.
The Fed's gradual interest-rate hikes are meant to balance risks as it tries to keep the economy on track, Powell said, but offered few clues on how much longer the U.S. central bank would raise interest rates in the face of a global slowdown and market volatility at home.
"He's now acknowledging he's close to neutral, which suggests maybe not quite as many rate hikes in the future as investors believed. It's certainly a change of language and welcome news to investors," said Jack Ablin, chief investment officer at cresset wealth advisors in Chicago.
"It makes the value of risk aversion less attractive, so it makes risk taking, such as stock investments, more attractive."
Ten of the 11 major S&P sectors were higher, with the technology sector's <.SPLRCT> 2.45 percent rise leading the gains.
Yields on two-year Treasury
Financials <.SPSY> rose 1.2 percent, boosted by gains in U.S. lenders including JPMorgan Chase & Co
Earlier in the day, the central bank, in a first-ever report devoted to financial stability, said trade tensions, Brexit discussions, trouble in China and emerging markets could rock a U.S. financial system where asset prices are "elevated" and business credit quality may be "deteriorating."
At 12:49 a.m. EDT the Dow Jones Industrial Average <.DJI> was up 477.47 points, or 1.93 percent, at 25,226.20, the S&P 500 <.SPX> was up 42.76 points, or 1.59 percent, at 2,724.93 and the Nasdaq Composite <.IXIC> was up 142.77 points, or 2.02 percent, at 7,225.47.
Markets also took heart from White House economic adviser Larry Kudlow's comments on Tuesday that opened the possibility that the United States and China would reach a trade deal at the upcoming G20 Summit.
Advancing issues outnumbered decliners by a 3.45-to-1 ratio on the and by a 2.96-to-1 ratio on the Nasdaq
The S&P index recorded 13 new 52-week highs and five new lows, while the Nasdaq recorded 25 new highs and 107 new lows.
(Reporting by Amy Caren Daniel in Bengaluru and Sinead Carew; Editing by Arun Koyyur)
This story has not been edited by Firstpost staff and is generated by auto-feed.
By Robin Emmott and John Irish | BRUSSELS/PARIS BRUSSELS/PARIS France and Germany will agree to a U.S. plan for NATO to take a bigger role in the fight against Islamic militants at a meeting with President Donald Trump on Thursday, but insist the move is purely symbolic, four senior European diplomats said.The decision to allow the North Atlantic Treaty Organization to join the coalition against Islamic State in Syria and Iraq follows weeks of pressure on the two allies, who are wary of NATO confronting Russia in Syria and of alienating Arab countries who see NATO as pushing a pro-Western agenda."NATO as an institution will join the coalition," said one senior diplomat involved in the discussions. "The question is whether this just a symbolic gesture to the United States
BEIJING Chinese President Xi Jinping on Wednesday called for greater efforts to make the country's navy a world class one, strong in operations on, below and above the surface, as it steps up its ability to project power far from its shores.China's navy has taken an increasingly prominent role in recent months, with a rising star admiral taking command, its first aircraft carrier sailing around self-ruled Taiwan and a new aircraft carrier launched last month.With President Donald Trump promising a US shipbuilding spree and unnerving Beijing with his unpredictable approach on hot button issues including Taiwan and the South and East China Seas, China is pushing to narrow the gap with the U.S. Navy.Inspecting navy headquarters, Xi said the navy should "aim for the top ranks in the world", the Defence Ministry said in a statement about his visit."Building a strong and modern navy is an important mark of a top ranking global military," the ministry paraphrased Xi as saying.