- Title: MARKETS-STOCKS/USA CLOSE Dovish Fed drives Wall Street higher
- Date: 8th October 2015
- Summary: NEW YORK CITY, NEW YORK, UNITED STATES (OCTOBER 8, 2015) (REUTERS) (SOUNDBITE) (English) AJAY GUPTA, CEO AND CIO, GUPTA WEALTH MANAGEMENT, SAYING: "I think the market reacted somewhat neutrally. The minutes that came out didn't have any surprises. They were thinking about raising rates in September but they thought with what's happening overseas, maybe let's wait another q
- Embargoed: 23rd October 2015 13:00
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- Topics: General
- Reuters ID: LVACQLHRV7Z2J2O8YAADYNNFKYM0
- Aspect Ratio: 16:9
- Story Text: U.S. stocks ended higher on Thursday (October 8) with the S&P 500 closing at a seven-week high as investors saw further signs of dovishness in the Federal Reserve's September meeting minutes which shed light on its decision to keep interest rates near zero.
The minutes showed the U.S. central bank thought the economy was close to warranting a rate hike but decided it was prudent to wait for evidence a global economic slowdown was not knocking the United States off course.
While the initial reaction was muted, stocks gained ground as the session wore on. Strategists said the minutes showed less inclination for a rate hike and no unforeseen worries in the Fed's view of the U.S. economy.
"I think the market reacted somewhat neutrally. The minutes that came out didn't have any surprises. They were thinking about raising rates in September but they thought with what's happening overseas, maybe let's wait another quarter before the next meeting and then decide," said Ajay Gupta of Gupta Wealth Management.
Last week's unexpectedly weak jobs report pushed back many investors' expectations for the timing of the Fed's first rate hike since 2006.
The Sept. 17 Fed decision came during a period of heavy market volatility due to concerns about slowing global economic growth, particularly in China.
Gupta says for investors he sees value in small cap, U.S. stocks.
"From these levels right now as far as where there's value, number one, it's not susceptible to what's happening in the emerging markets. They're focusing on the expanding economies of the United States. So we're bullish and optimistic, and relatively speaking, I think it's a smart thing to add to the portfolio," said Gupta.
The Dow Jones industrial average rose 138.46 points, or 0.82 percent, to 17,050.75, the S&P 500 gained 17.6 points, or 0.88 percent, to 2,013.43 and the Nasdaq Composite added 19.64 points, or 0.41 percent, to 4,810.79.
The S&P closed above its 50-day moving average for the first time since Aug. 18.
The 10 major S&P sectors ended higher and energy led the way with a 1.9 percent jump as crude oil prices rallied to settle at a three-month high after a closely watched oil forecaster predicted prices would climb to $75 a barrel over the next two years, adding to early gains.
The health index ended 0.4 percent higher after spending much of the day in the red.
Alcoa officially started the earnings season after the market close, with a weak report that sent its shares down 4 percent in extended trading. Its quarterly sales fell 10.7 percent and missed expectations.
Investors are bracing for the effect of slowing global growth and a strong dollar on third-quarter earnings. Profits of companies in the S&P 500 are expected to fall 4.5 percent in the quarter, the biggest decline in six years, according to Thomson Reuters data.
Advancing issues outnumbered declining ones on the NYSE by 2,376 to 690, for a 3.44-to-1 ratio on the upside; on the Nasdaq, 1,808 issues rose and 973 fell for a 1.86-to-1 ratio favoring advancers. - Copyright Holder: REUTERS
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