There is still time left before the central bank starts decreasing its bond purchases. This is what was suggested by Federal Reserve policymakers in several speeches. Due to this and positive economic reports, yesterday, Thursday June 27, stocks closed near their highs.
The Dow Jones Industrial Average rallied 114.35 points and closed at 15024.49. It was boosted by Boeing and Hewlett-Packard, logging its first three day rally since end of April.
S&P 500 moved ahead 9.94 points, ending at 1613.20, while the NASDAQ jumped 25.64 points, ending at 3401.86.
The CBOE Volatility Index (VIX), widely known as the best measure of fear in the market, ended below 17.
Material dipped while most S&P sectors flourished, led by financials and consumer discretionary.
China’s positive economic data also aided in strengthening sentiment. Industrial profits suddenly rose by 15 percent in May, which was unexpected, since the expectations were of a slowdown.
According to the Labor Department, weekly jobless claims fell by 9000 last week to seasonally adjusted 346000. This was in line with expectations. The four-week moving average for new claims dipped 2750 to 345750, and also consumer spending bounced back with 0.3 percent in May, after a decline by 0.3 percent in the previous month, according to the Commerce Department.
Dennis Lockhart, President of Atlanta Federal Reserve, said in remarks prepared for delivery to the Kiwanis Club of Marietta, that the U.S. economy’s path will establish the fate of the central bank’s bond purchases, but it would be suitable to pull back slightly if the economy performs as expected.