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Fed report sends share prices northward
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U.S. stocks went through an upward swing after a report from
the Federal Reserve showed business activity growing in almost all regions of
the country, which in return indicated that the spate of the Fed's interest rate
hikes might abate in the near future.
The Wall Street was reeling under pressure when the Fed
released its Beige Book, a cross-country survey of the overall business climate.
According to the Central Bank, the job market has improved and inflation has
been contained -- both were a major concern for the Fed and the stock marker. 7
out of 12 districts have indicated growing regional economies.
Robert Tipp, chief investment strategist for Prudential
Investment Management fixed income noted that this year's Beige Book was gentler
than the previous Beige Books and they relayed enough signs to the Feds that the
economy is showing positive trends and so they should put a leash on the ever
increasing interest rates.
As the housing market sizzled, the sale of new homes reached
an all-time high in June. To elongate the growth trend, factory orders for
big-ticket manufactured products manifest strong signs of growth with a 1.4%
increase in June. These are exactly the kinds of news of news the investors want
to hear, say the analysts, while corporate earnings too are upbeat.
Jack Caffrey, equities strategist at J.P. Morgan Private Bank
observed that the expected economic slowdown that takes place at this time of
the year isn't occurring this time.
Advancing issues were 9 compared to the decliner's 7 on the
New York Stock Exchange, where consolidated volume came to 2.02 billion shares,
compared to 1.97 billion shares on Tuesday. - Article by
Amrit Hallan for CMR news.
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