Stocks Lower As China Reform Promise Disappoints
The Associated Press
LONDON (AP) a¿¿ World stocks mostly rose Thursday after the incoming Federal Reserve chief suggested the U.S. central bank won't cut its economic stimulus until March or later. Gains in Europe, however, were capped by news the recovery there nearly ground to a halt.
Janet Yellen, who is slated to replace Ben Bernanke as Fed chairman at the end of January, told a Senate banking committee Thursday that the U.S. economy still needs the Fed's support.
While there was progress in the recovery, Yellen said the labor market and economy are "performing far short of their potential." She said unemployment was still too high and inflation still below target.She reiterated the world's No. 1 economy must show continued signs of improvement before the Fed starts tapering off its $85 billion of monthly bond purchases. "That statement alone has changed the landscape of trade today," said Evan Lucas, market strategist with IG in Melbourne, Australia. It suggests the bond buying effort, which has kept commercial interest rates low to encourage borrowing and investment, will be kept in place at current levels until the end of the first quarter of next year, he said. Analysts had previously thought the Fed would start reducing its stimulus in December or January. Major European benchmarks rose despite figures showing the eurozone economy grew a mere 0.1 percent in the third quarter, just three months after emerging from recession. The figure showed weakness in core economies, such as France and Germany, and only mild improvements in crisis-hit countries like Spain. Germany's DAX rose 1.1 percent to close at 9,149.66 while France's CAC-40 rose 1 percent to 4,283.91. Britain's FTSE 100 gained 0.5 percent to 6,666.13. U.S. markets rose, pushing major indexes to record highs after Yellen's comments. The Dow was up 0.2 percent at 15,856.52.20 while the S&P 500 gained 0.3 percent to 1,788.
Select the service that is right for you!COMPARE ALL SERVICES
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
- Real Money + Doug Kass + 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV