Strong economic data offsets recent dips in stocks

May 20, 2013 7:57 am

stocksnewspaperDow Jones Industrial Index recorded a new record high to 15354.40, an increase of 0.8%. This is a third record high in last four sessions. The last minute raise in shares helped the index to overcome recent share loss in price. The other average also hit a record high. S&P 500 reached price of 1667.47 with a 1% increase recording a straight four week gain.

The boost in stocks was influenced mainly of the economic data issued recently about the consumer sentiment. Leading indicator index also exceeded estimates. The positive economic data immediately boosted more sensitive sectors such as financial, energy, industrial. The main reasons for Dow Jones average highs were JP Morgan Chase and the aerospace company Boeing Inc.

Jenniffer Lee, senior economist at BMO Capital said: “This much-better-than-expected report indicates that stock markets as record highs, appreciating house values and a generally stronger economy does good things to confidence”.

A question now is would the Fed pull back from supporting economy with stimulus and is the economy on a way of standing by itself, sustaining itself. The bond-buying program gave the economy a needed tap on the back. European and Asian markets also responded to recent improvements of US stock market. The Stoxx Europe 600 advanced by 0.2% due to raise in auto sector. Asia China’s Shanghai Composite Index climbed 1.4%. Japan’s Nikkei Stock Average rose 0.7% finishing at a 52 week high.

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