NEW YORK, New York – Uncertainty over the future direction of inflation and interest rates gave way, ahead of the European Central Bank’s meeting later in the day at which an interest rate hikeo of 0-.50 percent surprised investors who expected just 0.25 percent.
“They need to be raising rates to deal with the way inflation is embedded,” George Boubouras, head of research at K2 Asset Management in Melbourne told Reuters Thursday.
“But the dilemma they’ve got is that the lack of energy security planning has regions of the European Union in a very difficult position…one can only assume that you’ve got minimal upside and large downside risks to the European economy,” he said.
Strong earnings reports helped lift Wall Street.
“The earnings picture has been maybe a little better than investors feared,” J. Bryant Evans, investment adviser and portfolio manager at Cozad Asset Management told Reuters Thursday.
“We investors are thinking that ..especially technology (sector) has come down too far, and maybe there’s some valuation opportunities there.”
The Standard and Poor’s 500 climbed 39.05 points, or 0.99 percent, to 3,998.95.
The Nasdaq Composite rallied 161.96 points, or 1.36 percent, to 12,059.61.
The Dow Jones Industrial Average gained 162.06 points, or 0.51 percent, to 32,036.90.
The euro responded positively to the ECB rate hike, its first in 11 years. Around the New York close Thursday the euro was fetching 1.0222 U.S. dollars. The British pound slipped to 1.1989. The Japanese yen firmed to 137.38. The Swiss franc was stronger at 0.9666.
The Canadian dollar inched up to 1.2869. The Australian dollar swelled to 0.6926. The New Zealand dollar strengthened to 0.6243.
On overseas equity markets, the German Dax fell 0.27 percent. The Paris-based CAC 40 rose 0.27 percent. In London, the FTSE 100 increased 0.09 percent.
In Asia the Hang Seng in Hong Kong had a bad turn, falling 1.51 percent. China’s Shanghai Composite slid 0.99 percent. Japan’s Nikkei 225 added 0.44 percent. The Australian All Ordinaries rose 0.61 percent.
In New Zealand, the S&P/NZX 50 climbed 0.63 percent. South Korea’s Kospit Compiste gained 0.93 percent.
Previously on Wall Street, the Nasdaq Composite rose 184.50 points or 1.58 percent to 11,897.65.
The Standard and Poor’s 500 climbed 23.21 points or 0.59 percent to 3,959.90.
The Dow Jones industrials added 47.79 points or 0.15 percent to 31,874.84.