Wall Street rises after ECB statement, retail sales data

June 14th, 20183:15 pm @

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(Reuters) – U.S. stocks rose on Thursday after the European Central Bank promised not to raise euro zone interest rates before the middle of next year and on better-than-expected May retail sales data.

Traders work on the floor of the New York Stock Exchange (NYSE) in New York City, U.S. June 13, 2018. REUTERS/Brendan McDermid

The bank’s statement came as a relief, especially after the U.S. Federal Reserve raised interest rates for the second time this year on Wednesday and hinted at two more hikes by the end of 2018.

ECB, however, said it would wind down its 2.55 trillion euro stimulus program by the close of the year.

“There’s some concern that we’re going to see a lot tighter policy. But both the Fed and the ECB, especially, are very accommodative at this point and it doesn’t look like it’s going to derail the expansion that we’re seeing anytime soon,” said Scott Brown, chief economist at Raymond James in St. Petersburg, Florida.

Comcast jumped 4.4 percent after the company offered Twenty-First Century Fox $65 billion to lure Fox away from a merger with Walt Disney, with a 20 percent higher offer.

Disney also rose 2.1 percent, providing the biggest boost to the Dow Jones Industrial Average.

Data on Thursday showed U.S. retail sales increased more than expected in May, its biggest advance since November 2017 that indicated an acceleration in economic growth in the second quarter.

Other data showed a further tightening in labor market conditions, with the number of Americans on jobless rolls declining to a near 44-1/2-year low.

At 9:56 a.m. EDT the Dow Jones Industrial Average was up 63.60 points, or 0.25 percent, at 25,264.80, the SP 500 was up 6.04 points, or 0.22 percent, at 2,781.67 and the Nasdaq Composite was up 31.43 points, or 0.41 percent, at 7,727.13.

Nine of the 11 major SP sectors were higher, led by a 0.7 percent gain in the consumer discretionary index

Oracle dropped 4.6 percent after Nomura cut its price target on the business software maker’s stock.

Mylan fell 3.8 percent after the company said U.S. regulators were unable to approve its generic version of inhaled lung drug Advair as they found “minor deficiencies” in the treatment.

Advancing issues outnumbered decliners for a 2.03-to-1 ratio on the NYSE and for a 1.47-to-1 ratio on the Nasdaq.

The SP index recorded 22 new 52-week highs and one new low, while the Nasdaq recorded 85 new highs and 11 new lows.

Reporting by Sruthi Shankar in Bengaluru; Editing by Anil D’Silva

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