Asian stocks gain after Fed keeps rates low

US dollar rises versus yen, gold extends its record run

BEIJING, July 30, (AP): Asian stocks advanced Thursday after the U.S. Federal Reserve left interest rates near zero to support a struggling economy.

Benchmarks in Shanghai, Hong Kong and Seoul gained. Tokyo was lower.

Lower interest rates and investor optimism about a possible coronavirus vaccine have helped global markets recover most of this year’s losses. But analysts say it might be too early to bet the recovery will persist, given the rising infection numbers in the United States, Brazil and other countries.

The Shanghai Composite Index rose 0.1% to 3,297.57 while the Nikkei 225 in Tokyo gave up 0.1 to 22,367.74.

The Hang Seng in Hong Kong gained 1% to 25,143.60 despite data showing the territory’s economy shrank by 9% in the quarter ending in June.

The Kospi in Seoul advanced 0.3% to 2,270.65 and Sydney’s S&P-ASX 200 added 0.7% to 6,050.80. India’s Sensex opened up 0.7% at 38,349.93. New Zealand and Jakarta advanced while Singapore and Bangkok retreated.

Gold rose to $1,956.60 per ounce from Wednesday’s $1,953.40. It briefly touched $1,960 the previous day.

In energy markets, benchmark U.S. crude lost 3 cents to $41.24 per barrel in electronic trading on the New York Mercantile Exchange. The contract gained 23 cents on Wednesday to $41.27. Brent crude, used to price international oils, was unchanged at $44.09 per barrel in London.

The U.S. dollar rose to 105.08 yen from 104.90 yen on Wednesday. The euro fell to $1.1773 from $1.1789.

Wall Street rallied on Wednesday, and the S&P 500 climbed 1.2% for its best day in two weeks after the Federal Reserve kept the accelerator floored on its support for the economy.

U.S. stocks began rising as soon as trading opened, and momentum picked up after the Fed said in the afternoon that it will keep interest rates at their record low as the economy struggles through the recession created by the coronavirus pandemic.

The S&P 500 gained 40.00 points

A currency trader walks near the screen showing the foreign exchange rate between U.S. dollar and South Korean won at the foreign exchange dealing room in Seoul, South Korea, Thursday, July 30, 2020. Asian stocks advanced

Thursday after the U.S. Federal Reserve left interest rates near zero to support a struggling economy. (AP)

to 3,258.44 for its second gain in the last three days. The Dow Jones Industrial Average rose 160.29, or 0.6%, to 26,539.57, and the Nasdaq composite added 140.85, or 1.4%, to 10,542.94.

Besides keeping short-term rates pinned at nearly zero, the Federal Reserve also said it will continue to buy about $120 billion in Treasury and mortgage bonds each month to support the economy.

“The Fed has done a lot,” said Kirk Hartman, president and global chief investment officer at Wells Fargo Asset Management. “It was very clear today that they’ll stand by and continue to be accommodative.”

Such aid from the Fed, along with stimulus from Congress, helped launch the stock market’s turnaround in March. Congress is also locked in negotiations for more support for the economy, with $600 in weekly unemployment benefits about to expire. Democrats and Republicans seem to remain far apart in their proposals, but investors are still hopeful about a deal’s chances.

If those two remain in hand, the big wild card for markets will continue to be the coronavirus pandemic and whether a vaccine can be developed for it within the next year.

“The markets are very strong, but the real economy is not so strong,” Hartman said. “The markets are betting on a recovery, on a vaccine rolling out at the end of the year. That’s the only way you can justify the market” at the levels it’s reached, along with the continued rescue efforts by the Federal Reserve.

The S&P 500 is back within 3.8% of its record set in February after earlier being down nearly 34%.

Besides the action in Washington, this is also a frenetic week for profit reports from the biggest U.S. companies. Several reported results for the spring that topped Wall Street’s expectations, even though they were far below last year’s levels from before the pandemic. That’s been the general trend so far this earnings season, with 40% of companies in the S&P 500 having reported.

Advanced Micro Devices rose 12.5% after it reported a stronger jump in profit for its latest quarter than Wall Street expected. The chip maker also raised its forecast for revenue through 2020. It’s notable because many companies have been pulling their forecasts or declining to offer any given all the uncertainty in the economy created by the pandemic.

Starbucks gained 3.7% after it reported a loss for the spring that wasn’t as bad as analysts were expecting.

L Brands, the parent company of Victoria’s Secret, soared 35.4% for the biggest gain in the S&P 500 after it laid out plans to slash its annual costs by $400 million, including through laying off workers. The stock had been struggling for years before turning higher in the spring, and analysts say the cost cuts should help bolster the company’s profitability.

Eastman Kodak’s stock more than tripled for the second straight day after the company won a $765 million government loan to launch a new business unit making pharmaceutical components. It surged 318.1% to $33.20, up from $2.62 on Monday.

Big technology CEOs, meanwhile, testified at a House of Representatives subcommittee hearing on whether their companies have grown too big and harm competition.

NEW YORK, July 30, (AP): Target is joining Walmart in closing its stores on Thanksgiving Day, ending a decade long tradition of jump-starting Black Friday door buster sales.

The move, announced Monday, comes as stores are rethinking this year’s Black Friday shopping bonanza weekend – along with other key retail days during the holiday season – as the country battles the coronavirus pandemic.

Stores always depended on big holiday crowds and work as much as a year in advance with manufacturers on securing exclusive items. Now, the virus has turned the holiday shopping model upside down. Stores have slashed orders and crowds are an anathema. With fears of a wave of virus cases in the fall, the biggest nightmare would be if retailers had to reclose during the most critical time of the year, analysts said.

“Historically, deal hunting and holiday shopping can mean crowded events, and this isn’t a year for crowds,” Minneapolis-based Target said in a corporate blog posted. It said its holiday deals would come earlier than ever – starting in October.

Walmart, the nation’s largest retailer, announced its move last week.

Target opened for the first time on Thanksgiving in 2011, joining other stores in starting Black Friday sales a day early and creating a new tradition of shoppers heading out to the stores after their turkey feast. Many retailers did so because they were trying to better compete with Amazon and other online players.

But sales ended up eating into Black Friday and many critics lambasted stores for not honoring the holiday and allowing their workers to spend it with family. In response to the backlash and also poor sales, some stores and malls like Bloomington, Minnesota-based Mall of America, reversed course and have not to opened on Thanksgiving in recent years. Costco and Nordstrom among others have always remained closed on Thanksgiving, noting they want to respect the holiday.

The bigger question still looms on how to handle Black Friday itself, which also draws huge crowds – and sales. Despite competition from Thanksgiving shopping, Black Friday ranks as either the top or No. 2 sales day of the year.

Thanksgiving is not even in the top 10 because sales start around 5 pm. But the day ranked third in online shopping behind Cyber Monday and Black Friday respectively last year, according to Adobe Analytics, which tracks online sales for 80 of the top 100 retailers.

Walmart and Target declined to comment on their plans for Black Friday, but analysts say they believe that the retailers will pivot their business more online and focus on limiting the number of shoppers in stores. Like Target, other retailers will also likely start holiday sales even earlier to stretch out crowds.

Macy’s CEO Jeff Gennette said earlier this month that the department store will be pivoting its Black Friday business more toward online and will likely be going “full force” with holiday marketing right after Halloween.

This file photo shows a view of the Target store in Annapolis, Md. Target is joining Walmart in closing its stores on Thanksgiving Day, ending a decade-long tradition of jump starting Black Friday sales. The move, announced Monday, July 27 comes as stores are rethinking the Black Friday in-store door busters as they try to curb the spread of the coronavirus, which has seen a resurgence in a slew

of states. (AP)