Wall Street Ends a Wild Week with Small Gains and Losses

31 Aug 2015 | Author: | No comments yet »

Optimism fuels Wall Street rally.

Investors have suffered one of the most tumultuous weeks in recent trading history, spurred on by fears of a global economic slowdown. New York – Wall Street rallied more than 2 percent on Thursday as strong US economic data and hints that a September interest-rate hike was unlikely fuelled optimism that the worst of recent market turmoil was over.

The Dow Jones industrial average scored its biggest two-day percentage gain since 2008, while the S&P 500 and Nasdaq Composite racked up their biggest two-day increases since 2009. “The worst is probably behind us but it’s going to take a while before we get back to normal and we might still see some downward risk,” said Scott Brown, chief economist at Raymond James in St Petersburg, Florida. Robert Deutsch, USA TODAY Stocks ended mixed in a narrow range Friday as Wall Street closed out one of its most turbulent weeks in years that saw the major indexes swing dramatically and fall into official correction territory for the first time since 2011. Vice Chairman of the Federal Reserve Stanley Fischer said it was now too early to decide to raise rates, especially after the crazy week for the markets and China’s devaluation of its currency. Well, so far it has been able to do that and today’s data really puts a line under that.” Even if the Fed does not tighten policy in September, expectations of an eventual hike will remain a major overhang on sentiment, warned Jim Bianco, president of Bianco Research in Chicago. “The era of easy money would officially be over,” Bianco said. “A rate hike would mean putting the needle away, no more drugs, time for the methadone.” To that end, investors will keep an eye on an annual conference of some of the world’s top central bankers in Jackson Hole, Wyoming over the next few days for further clues on interest rates.

In a sign that a faltering Chinese economy and slumping global financial markets could affect U.S. monetary policy, New York Fed President William Dudley said the prospect of a September rate hike seemed “less compelling” than it was just weeks ago. University of Michigan Survey of Consumers Chief Economist Richard Curtin says, “The data suggest that real personal consumption expenditures will expand by a still healthy 2.9 percent in 2015, with the pace of growth rising to 3.0 percent in 2016. Global Investors Inc in San Antonio. “A lot of people were anticipating the last half of the day would roll over and fall off and that hasn’t happened,” Matousek said. “You could see the buying accelerating at mid-day and people saying ‘I’m wrong’, and starting to cover their shorts.” Dudley’s dovish comments came even after data on Wednesday that appeared to strengthen the case for a rise in interest rates at a Fed policy meeting on Sept 16-17. Needless to say, consumer sentiment must be carefully monitored in the months ahead.” World markets had their own issues this week with volatility and sell-offs, but Asia’s markets ended mostly higher with Japan’s Nikkei 225 gaining 2.9 percent and the Shanghai composite index up 4.8 percent.

The S&P 500’s valuation was about 15.4 times expected earnings as of Wednesday’s close, compared to around 17 for much of 2015, according to the most recent available Thomson Reuters StarMine data. About 9.9 billion shares traded on US exchanges and the 15-day moving average of 8.1 billion was the highest this year, according to Thomson Reuters data.

We’ve got a little over two weeks before we make a decision and we’ve got to see the incoming data.” In economic news released Friday, the government reported that personal income rose 0.4% in July as consumer spending gained 0.3%. After the bell, Apple supplier Avago Technologies posted fiscal third-quarter earnings per share that beat analysts’ expectations and its shares rose 2 percent. Verified email addresses: All users on Independent Media news sites are now required to have a verified email address before being allowed to comment on articles.

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