US stocks were on the rise on Thursday morning amid ongoing policy discussions both in the US and in Europe as the trio of stock indices reflected that movement.
Thursday, May 8, 2014
President Mario Draghi with the European Central Bank indicated the body he leads is likely to reduce borrowing costs – but not until next month. Chair Janet Yellen with the US Federal Reserve told a US congressional panel that the globe's largest economy continues to need stimulus measures to spur growth and development. With the confirmation from the US' top banker, the market will continue to see large amounts of the US dollar to purchase debt. For that reason, the value of the dollar will be watered down. The US dollar was slumping during the Thursday trade session, which – in turn – spurs the price of gold higher given the two typically perform the inverse of one-another. Before 11 a.m. in New York on May 8, the Nasdaq Composite edged up 0.71 %, a 28.78 point fall to 4,095.43; the Standard & Poor's 500 slightly rose 0.29 %, an upward tick of 5.28 points to 1,883.81; and the Dow Jones Industrial Average moderately gained 0.25 %, a 41.48 point jump to 16,560.02.
Stock markets were spurred higher by the Wednesday testimony of the Fed chief, Reuters reports. She told the Joint Economic Committee of the US Congress that the Fed will continue purchasing debt. While also telling the panel that the US economy is strengthening, Yellen noted stimulus will continue. The body has said since late last year that it is aiming to close stimulus measures by the end of this year.
But she noted that the first quarter of this year was somewhat slower in the US, which she attributed to that perpetual suspect Old Man Winter. "I see that pause as mostly reflecting transitory factors, including the effects of the unusually cold and snowy winter weather," the Fed chief told the panel, according to Forbes.
Gold serves as a safe-haven for investors seeking storage. Bullion often tracks the upward drive of the shared currency of the European Union. But for the first time last year, gold futures endured annual losses after marking 12 consecutive years of gains. The record price of the precious metal is $1,923 per troy as established in September 2011.
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