Global stocks reach record highs
NEW YORK (Reuters) – Stocks globally reached a record high on Wednesday ahead of a widely expected interest-rate increase by the US Federal Reserve, while US Treasury yields fell on disappointing inflation data.
MSCI’s gauge of stocks across the globe also rose to a record high, gaining 0.31%.
The Fed was expected to raise rates to between 1.25% and 1.50% during a two-day policy meeting that ended Wednesday. The central bank also was expected to comment on how the Trump administration’s tax overhaul could affect the US economy.
“I suspect that they [the Fed] will probably elaborate on the tax cuts and future spending of the infrastructure and how they will relate to future inflation,” said Peter Cardillo, the chief market economist at First Standard Financial in New York.
Wall Street indexes advanced, with the S&P 500 and the Dow reaching record highs as technology stocks gained. Western Digital rose 2.83% after the data-storage device company agreed to settle a dispute with Toshiba.
In late-morning trading, the Dow Jones Industrial Average rose 113.5 points, or 0.46%, to 24,618.3, the S&P 500 gained 6.55 points, or 0.25%, to 2,670.66, and the Nasdaq Composite added 29.12 points, or 0.42%, to 6,891.44.
The pan-European FTSEurofirst 300 index fell 0.24%.
In Asia, MSCI’s broadest index of Asia-Pacific shares outside Japan climbed 0.73%.
Japan’s Nikkei stock index finished 0.47% lower, however, pressured by a strengthening yen and shrugging off upbeat economic data that showed Japanese core machinery orders rose a more-than-expected 5% in October.
US Treasury yields declined as an increase in core consumer prices in November fell short of analysts’ expectations, reducing bets on a broad pickup in inflation.
Benchmark 10-year notes last rose 7/32 in price to yield 2.3797%, compared with 2.403% late on Tuesday.
The 30-year bond last rose 19/32 in price to yield 2.7522%, compared with 2.781% late on Tuesday.
On Wednesday, data showed the consumer price index, the government’s broadest inflation gauge, grew 0.4% last month, matching economists’ estimates.
However, the CPI core rate, which excludes energy and food prices, moderated to 0.1% from a 0.2% increase in October and below market expectations.
The dollar index, which weighs the greenback against a basket of currencies, fell 0.26%, while the euro rose 0.19% to $1.1762.
The Japanese yen strengthened 0.45% against the greenback to 113.05 per dollar, while sterling was last trading at $1.3364, up 0.37% on the day.
Italian bonds were firmly in play. Yields jumped on reports a long-anticipated national election will be held on March 4, raising concerns about political stability.
US crude fell 0.39% to $56.92 per barrel, and Brent was last at $62.79, down 0.87% on the day.
Spot gold rose 0.4% to $1,247.95 an ounce.