US stocks push higher on weak dollar

June 7, 2013 7:17 am

The US stock market pushed higher offsetting recent declines, triggered by the huge drop in dollar versus the yen. The volatility in stock market yesterday was caused by negative data on US initial jobless claims and strong European economic data which pushed the euro higher versus the dollar.

The S&P 500 index erased previous two days of  losses. The index rose 0.85% after falling 0.7% same day earlier. Dow Jones Industrial Average added 0.5% during a session with a three month higher than average trading volume.

“The U.S. markets are going through a transition from being liquidity driven to a rally based on fundamental data and that’s a very bumpy ride,” Andres Garcia-Amaya, global market strategist at JP Morgan Funds said for Bloomberg.

The labor department report today should shed more light on Fed’s decision of tapering the bond-buying quantitative program. The department is expected to show employers added 163 000 workers to non farm payrolls last month, a number similar to the previous month.

The European benchmark indexes fell yesterday after the Central Bank’s president Mario Draghi pointed that economy may need additional stimulus. He assured that Europe would most likely return to economy growth at the end of this year.

In corporate news, VeriFone Systems plunged by 20.87% after the card-payment system maker provided a disappointing quarterly earnings and revenue.

Ten industries included in S&P 500 jumped yesterday. AT&T rose 1.56% as phone stocks were the strongest during the session. Bank and health-care industry were up 1.4%.

Costco Wholesale Corp. added 1.8% after reporting an increase of sales.

 

 

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