News Column

New Wall Street high after bullish data

June 25, 2014

US equities hit another record high on Tuesday after encouraging data on consumer confidence and new home sales, while sterling fell after the head of the Bank of England stirred doubts about how soon interest rates would rise.

The dollar and US Treasuries prices gained, but flagging business morale in Germany pulled European stocks lower. The S&P 500 eked out another intraday record and was on track for its seventh straight rise in the past eight sessions.

"We remain bullish and are advising our clients to remain overweight on equities, but the levels of valuations and investor sentiment are starting to give us pause in the short term," said Bill Greiner, chief investment officer of Mariner Wealth Advisors, in Leawood, Kansas. "We're not in nosebleed territory, but we are a bit stretched."

The Dow Jones industrial average was up 23.31 points, or 0.14 per cent, at 16,960.57. The Standard & Poor's 500 Index was up 4.69 points, or 0.24 per cent, at 1,967.30. The Nasdaq Composite Index was up 30.62 points, or 0.70 per cent, at 4,399.30.

US Treasury bonds rose, pushing the 10-year benchmark yield down almost two basis points to 2.60 per cent.

Germany's Ifo index of business sentiment eased more than expected in June to its lowest level this year. "You are seeing economic statistics in Europe that are disappointing," said Francois Savary, chief investment officer at Swiss bank Reyl. The FTSEurofirst 300 index of leading shares was off 0.06 per cent, while the MSCI world stocks indicator was up 0.1 per cent.

Sterling fell below $1.70, down further from recent five-year peaks after BoE Governor Mark Carney said there was little wage or inflationary pressure in the UK economy, and that spare capacity will need to be absorbed before rates rise. Sterling was last down 0.3 per cent at $1.6968, having earlier fallen more than half a cent to as low as $1.6971.

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Source: Khaleej Times (United Arab Emirates)

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