The S& P 500 and Nasdaq Composite opened at record highs on Thursday after minutes of the Federal Reserve’s latest…
By Tanya Agrawal
May 25 (Reuters) – The S& P 500 and Nasdaq Composite opened at record highs on Thursday after minutes of the Federal Reserve’s latest meeting showed policymakers expected the economy to pick up momentum.
While policymakers expected they would raise interest rates sooner rather than later, they agreed they should hold off until it was clear a recent slowdown in the economy was temporary.
Federal funds futures imply traders see an 83 percent chance of a rate hike in June, unchanged from before the minutes, according to the CME Group’s FedWatch tool.
However, the odds of a further increase this year dipped to 46 percent, from roughly 50 percent late on Tuesday.
« I think the markets are pretty okay at this point with a June rate hike, » said Scott Brown, chief economist at Raymond James in St. Petersburg, Florida.
« The Fed made it pretty clear that the economic slowdown is transitory and as long as the economic data picks up, we should see a rate hike next month. The only hurdle to that could be employment numbers, » said Brown, referring to the data for May due next week.
While recent economic data has been mixed, with signs of a dip in consumer sentiment and spending, the job market continues to strengthen.
That was reinforced by the jobless claims data, which showed that claims rose less than expected last week and the four-week moving average of claims fell to a 44-year low.
At 9: 37 a.m. ET (1337 GMT) the Dow Jones Industrial Average was up 51.51 points, or 0.25 percent, at 21,063.93.
The S& P 500 was up 4.66 points, or 0.19 percent, at 2,409.05, easing after hitting a record of 2,409.96.
The Nasdaq Composite was up 16.16 points, or 0.26 percent, at 6,179.18. The index hit an all-time high of 6,183.02.
Eight of the 11 major S& P 500 sectors were higher, with the consumer discretionary index’s 0.55 percent rise leading the advancers.
Retailers, which have been posting disappointing results, were set for an odd bright session.
Sears jumped 19 percent to $8.74 after posting its first quarterly profit in nearly two years.
Best Buy surged 12 percent as its comparable sales unexpectedly increased, making it the biggest boost on the S& P.
Tommy Hilfiger-owner PVH rose 5 percent and Guess jumped nearly 14 percent after issuing strong results and forecasts.
Advancing issues outnumbered decliners on the NYSE by 1,693 to 790. On the Nasdaq, 1,408 issues rose and 781 fell.
The S& P 500 index showed 49 new 52-week highs and three new lows, while the Nasdaq recorded 54 new highs and 14 new lows. (Reporting by Tanya Agrawal in Bengaluru; Editing by Savio D’Souza)
