US stocks were rising boosted by a read on factory activity that was much stronger than expected, although investors continued to grapple with the prospect of an earlier-than-expected rate hike.
Wall Street opened lower but reversed course after the Philadelphia Federal Reserve Bank said its business activity index rose far more than expected in March, rebounding after a contraction in February. In another positive report, jobless claims rose less than expected in the latest week.
Financial shares, which are tied to the pace of economic growth, were among the biggest gainers on Thursday, with the S&P financial group up 1.1 percent. JPMorgan Chase & Co gained 2.2 percent to $59.58 while Citigroup Inc added 1.9 percent to $49.87.
In her first press conference as chair of the Federal Reserve, Janet Yellen yesterday indicated that the first increase in interest rates could come early next year, estimating the «considerable period» between the end of the Fed’s stimulus and its first rate increase at possibly six months. Analysts widely expected a hike in the second half of 2015.
The Dow Jones industrial average was up 65.60 points, or 0.40 percent, at 16,287.77. The Standard & Poor’s 500 Index was up 6.47 points, or 0.35 percent, at 1,867.24. The Nasdaq Composite Index was up 15.85 points, or 0.37 percent, at 4,323.45.
European shares recouped early losses to finish steady today after data showing robust factory activity in the US mid-Atlantic region raised expectations that US economic recovery remained on track.
After falling as much as 1 percent earlier on concerns about an earlier-than-expected rise in US rates, the FTSEurofirst 300 index ended 0.06 percent higher at 1,305.87 points, helped by data from the Philadelphia Federal Reserve Bank showing its business activity index rose to 9.0 in March from -6.3 in February.
Meanwhile, Japanese stocks tumbled to a six-week low after Federal Reserve Chair Janet Yellen raised the prospect of interest rate hikes starting earlier than previously thought, sparking a selloff in equities before a three-day weekend. The Nikkei share average ended 1.7 percent lower at 14,224.23, the lowest closing level since Feb. 6. For the week, the index dropped 0.7 percent. Markets in Japan will shut tomorrow for a public holiday.
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