Wall Street is flirting with its highest levels since May, boosted by new strong data easing concerns over the recovery as traders await next week’s US Federal Reserve meeting.
The past week saw new positive data on the health of the global economic recovery with strong manufacturing figures from China and a modest rise in US retail sales for the second straight month.
For the week, the Dow Jones Industrial Average was up 1.39 percent to 10,607.85 in the third consecutive week of gains as it nears its highest levels since May. The broader S&P 500 index gained 1.45 percent to 1,125.59.
The NASDAQ composite ramped up 3.26 percent to 2,315.61 in a week where computer giant Hewlett-Packard announced its latest acquisition and technology bellwethers Oracle and Research in Motion reported strong quarterly results.
Confidence was bolstered early in the week when banking regulators meeting in Basel, Switzerland settled on reforms that will require banks to raise capital reserves substantially as a buffer against future financial breakdowns.
Jobless claims also fell faster than expected last week, extending a four-week decline. However, disappointing figures showing a slowdown in the US manufacturing sector poured some cold water on the enthusiasm.
“Economic news, especially retail sales and industrial numbers, told us that the probability of a double dip is less than many had thought,” independent analyst Hugh Johnson said, looking back at the week.
The upcoming week will bring new data on the faltering housing market, which could show a continued loss of momentum since last month’s disappointing data.
However, all eyes are on Tuesday’s meeting of the Federal Open Market Committee (FOMC), which is set to keep current historically-low interest rates unchanged from levels set in December 2008 in a effort to spark growth.
Investors will be closely following the tone of the FOMC’s statement on the current conditions of the US market as speculation grows on whether the Fed might redouble crisis-era spending policies to bolster the economy.
“Next week is all about the Fed,” analyst Gina Martin of Wells Fargo Securities said.
“It almost feels like the market is lying waiting for the Fed meeting next week because there are so many rumors whether or not we are going to get quantitative easing or some signals on inflation target,” she told reporters.
In its economic survey ahead of Tuesday’s meeting, the Fed noted continued growth in national economic activity between mid-July and the end of last month, “but with widespread signs of a deceleration.”
Taiwan’s Lee Chia-hao (李佳豪) on Sunday won a silver medal at the All England Open Badminton Championships in Birmingham, England, a career best. Lee, 25, took silver in the final of the men’s singles against world No. 1 Shi Yuqi (石宇奇) of China, who won 21-17, 21-19 in a tough match that lasted 51 minutes. After the match, the Taiwanese player, who ranks No. 22 in the world, said it felt unreal to be challenging an opponent of Shi’s caliber. “I had to be in peak form, and constantly switch my rhythm and tactics in order to score points effectively,” he said. Lee got
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