Optimism Drives Stocks Up

Optimism Drives Stocks Up

High expectations about economic data regarding the jobs market and regional manufacturing prompted US stock future indexes to hover in value on Thursday

Optimism Drives Stocks Up
Optimism Drives Stocks Up

After four consecutive days of gains, the S&P touched an all-time high on Wednesday, when it also marked its largest rise in almost one month. The index' gains on Wednesday were linked with the Fed suggesting borrowing costs will rise more quickly next year. Just after 10 a.m. in New York, the Nasdaq dropped 0.1%, a gain of 4.14 points to 4,358.75; the S&P 500 moderately rose 0.06%, a climb of 1.25 points to 1,958.23; and the Dow fell 0.08%, a drop of 14.36 points to 16,920.98.

The Fed decision on Wednesday to taper monthly asset purchases by $10 billion proved to be beneficial to European stocks. Fed chair Janet Yellen said on Wednesday that policy makers recognized the US economy was developing, which validated the monthly asset purchase reduction as the Fed aims to close the economy-spurring program by the end of this year.

Now standing at $35 billion per month, the stimulus program might close in the third quarter. During each of the five meetings thus far this year, the Fed's policy makers have slashed monthly purchases by $10 billion.

Jobless claims drop to 2007 lows
For week ended June 14, the US Department of Labor announced applications for unemployment insurance fell by 6,000 to amount to 312,000, according to Bloomberg. The number of people collect unemployment fell to its lowest rate since 2007. Household purchases are on the rise and companies are increasingly hiring. Expansion of payrolls is driving toward its strongest year since 1999.

Manufacturing gains in metropolitan Philadelphia
The Philadelphia Fed said area manufacturing is on the rise this month. Three key metrics – general activity, new orders and shipments – all pushed higher, marking the fourth consecutive month of gains. Those figures also gained from May to June.

The manufacturing companies that answered the Philadelphia Fed's survey also noted they are increasingly hiring. They hold a brighter outlook for future activity as well, which indicates an air of optimism for the next 180-day period. The forward-looking component of the poll was particular to the most recent survey considering the first half of the year is set to close in 10-plus days.

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