US markets closed lower on August 23, sliding back after President Donald Trump gave a fiery speech suggesting more political drama lies ahead.
At a rally in Phoenix, Arizona, on August 22, President Trump said he would be willing to shut down the government if Congress resists funding the Mexican border wall.
The president also said he was still considering terminating the North American Free Trade Agreement.
Investors are also concerned about the prospect of political fights next month, when Congress will be considering a budget proposal and are likely to be asked to raise the debt limit.
In 2013, a fight over the debt limit led to a government shutdown that disrupted the US economy, particularly in states closely tied to the federal government and its contractors.
Economists say scrapping NAFTA would also hurt business in the US, which counts Canada and Mexico among its biggest trade partners.
Retailer Lowe’s fell 3.7% after reporting lower than expected growth in the quarter.
United Technologies bounced 1.1% after a report suggested that it may be the target of activist investors.
The S&P 500 index closed on March 28 at a record high of 1,569, up 6 points or 0.4%.
The last time the S&P 500 index broke into new territory was on October 9, 2007, when it closed at 1,565.
The Dow Jones index was also up 0.4%, with a rise of 52 points taking it to a record 14,578.
The S&P 500 index closed on March 28 at a record high of 1,569
The Nasdaq joined in the upbeat mood created by the smooth reopening of banks in Cyprus and generally positive economic news. It rose 11 points, or 0.3%, to close at 3,268.
The S&P has been near its record high for several weeks, despite the still sluggish performance of the US economy. This means it finishes the quarter 10% higher than its level at the beginning of the year and more than double its low point during the financial crisis.
In relatively light trading, the biggest gainers in the Dow Jones were two IT companies – IBM and Hewlett-Packard, both up over 1%. The biggest falls were by Chevron and JP Morgan Chase.
On the currency markets, the euro rose 0.4 cents to $1.282.
US markets will be shut for the Good Friday holiday.
Dow Jones share index set a new all-time high on Tuesday, returning to levels not seen since before the global financial crisis.
The Wall Street index reached 14,273 in lunchtime trading, exceeding the previous record intra-day high of 14,198, set in October 2007.
The recovery in the market suggests investors are regaining confidence in the US economy.
That is despite the ongoing fiscal crisis in Washington.
Dow Jones index has more than doubled in value since it plummeted to less than 6,550 points in the depth of the crisis in March 2009.
Investors were encouraged by data released on Tuesday suggesting the US’s non-manufacturing industries, which account for about 90% of the economy, continued to expand last month.
The Institute for Supply Management said its services index rose to 56 in February from 55.2 in January – its highest level in a year.
More broadly investors have been encouraged by signs of recovery in the US housing market in recent months, and a return of consumer confidence.
“Key data is turning supportive. Companies are ready to re-invest and grow profitably. With luck, we will see a recovery take hold in the second half of the year,” said Paul Atkinson, head of North American equities at Aberdeen Asset Management.
“The question now is whether we are seeing a stealth rally in danger of running its course… or whether we have the conditions for further market gains.”
Other US indexes have also rallied in recent months.
The S&P 500 index – a broader index of US shares that is closely watched in the market – has risen by 125% since 2009, reaching 1,538 on Tuesday, but remains some way short of its pre-crisis high of 1,576.
By comparison the FTSE 100 index in London has risen by 68% from its 2009 low, but is some way off its all-time high, set in late 1999.
Dow Jones share index set a new all-time high on Tuesday, returning to levels not seen since before the global financial crisis
US consumer confidence rebounded unexpectedly in February, while data suggesting strong sales of new homes has been particularly encouraging, as housing construction has typically played a leading role in past US recoveries.
There are also signs big businesses are beginning to invest in capital spending rather than build up their cash piles, and are hiring more staff.
Analysts also say the commitment of central banks to quantitative easing (QE) and low interest rates has helped create optimism among investors, and made stocks and shares more attractive than bonds.
On Monday the vice chairman of the US Federal Reserve, Janet Yellen, said the central bank should press on with its QE programme, in which it spends $85 billion a month on buying bonds.
Its actions have outweighed concerns over the continued US fiscal crisis in Washington, where President Barack Obama has warned that “sequester” budget cuts will harm the economy.
Some investors also warn that the US recovery remains sluggish. The economy grew at an annualized rate of just 0.1% in the last three months of 2012, data published last week showed.
Dow Jones also only partially reflects the US economy, as it is made up of only 30 companies.
“What happens when this [QE programme] kind of evaporates or goes away, that’s the major question in the back of my mind,” said Anthony Conroy, head trader at brokerage BNY Convergex.
“But right now, the economy, the market, everything looks fairly healthy. Stocks still look fairly inexpensive.”
Global stock markets have fallen after some members of the Federal Reserve suggested its stimulus measures may be increasing the “risks of future economic and financial imbalances”.
The comments came in minutes of the Federal Reserve’s last meeting, where the Fed said it had left its monthly $85 billion bond-buying plan in place.
US markets opened lower on Thursday after recording their biggest drop so far this year on Wednesday.
European markets all closed down.
The Fed comments have raised expectations that the US central bank may scale back its bond-buying programme earlier than predicted.
Currently, the Fed is carrying out its plan of buying $85 billion of bonds a month until the US jobs market sees a substantial improvement.
By buying bonds, the Fed keeps interest rates low, which keeps the cost of borrowing for mortgages and other loans low.
However, the minutes of the Fed’s meeting in January showed that some members were concerned that the bond-buying programmes could push up inflation or could “foster market behavior that could undermine financial stability”.
The minutes said that “a number of participants” commented that an ongoing review of the effectiveness of the bond programme “might well lead the committee to taper or end its purchases before it judged that a substantial improvement in the outlook for the labor market had occurred”.
Global stock markets have fallen after some members of the Federal Reserve suggested its stimulus measures may be increasing the risks of future economic and financial imbalances
The bond-buying programme has been cited as a major reason for the rise in share prices in recent weeks, so signs of a premature end have hit stocks.
“US liquidity concerns following the Fed minutes looks like the pin which will burst the recent bubble in equities,” said Mike McCudden, head of derivatives at Interactive Investor.
On Wall Street, the Dow Jones index ended Wednesday down 108.13 points at 13,927.54, and continued to fall on Thursday, shedding a further 61 points by midday in New York.
In Asia, Japan’s Nikkei 225 fell 159.15 points, or 1.4%, to 11,309.13, while in Hong Kong the Hang Seng index closed down 400.74 points, or 1.7%, at 22,906.67.
European markets all fell, with London’s FTSE 100 closing down 1.6% at 6,291.54 and the Cac 40 in Paris falling 2.3% to 3,624.80.
The dollar rose 0.5% against the euro on Thursday, with one euro buying $1.3206.
While the dollar had been boosted by the Fed minutes, the euro was also hit by the latest survey of the eurozone region which suggested the downturn in the region’s businesses had worsened.
The latest eurozone purchasing managers’ index (PMI), compiled by research firm Markit, fell to 47.3 this month, down from 48.6 in January. A reading below 50 indicates contraction.
The figure was the lowest reading for two months and appeared to dash hopes that the eurozone’s economy would show signs of revival.
It also indicated a growing divergence between Germany and France, with output rising in Germany but declining at an increasing pace in France.
Google shares fell again on Friday – just 24 hours after $24 billion was lost from the company’s value.
Another $5 billion was wiped from Google as the stock fell once again on the back of a dire set of financial results.
The crash in its share price – due to a shock fall in the amount paid by advertisers – sent ripples through Wall Street, hitting other firms in the same sector.
Shares in Apple, the only technology company larger than Google in market value, fell by around 2.8% during trading.
Facebook, which is another technology stock heavily dependent on advertising for its revenues, saw its shares fall by 0.5% during trading.
The Dow Jones index of trading on Wall Street dipped more than 200 points.
Google’s humiliation began when its figures for the last three months were released prematurely on Thursday afternoon.
It revealed that profits had fallen by a fifth in the last three months – sending shares plunging, closing at $695.
Last night it was down a further 2.5% during trading to around $677.
Google blamed its printers for releasing the results by accident. Speculation was mounting on Friday night that Google could make a legal claim against R.R. Donnelley, the company it pays to put out its financial results.
The US economic growth slowed in the second quarter to an annualized pace of 1.5%, as consumer spending eased.
But growth in the first three months of the year was revised up to 2% from a previous estimate of 1.9%, the Commerce Department said.
Previous data was also revised to show the economy shrank by less during the 2007-9 recession than thought.
Despite the slowdown, the second quarter growth figures were better than expected and US stocks rallied sharply.
The main Dow Jones index closed up 188 points, or 1.5%, at 13,076, its highest level since early May.
A joint statement from French President Francois Hollande and German Chancellor Angela Merkel reasserting their commitment to preserving the euro also helped to push Wall Street higher.
The US economic growth slowed in the second quarter to an annualized pace of 1.5 percent, as consumer spending eased
The Commerce Department’s latest figures showed the US economy shrank by 4.7% from the start of the recession in 2007 until it ended in 2009.
It had earlier been thought the economy contracted by 5.1% over that period.
Separately, in its twice-yearly review, the White House revised down its forecast for growth in 2012 to 2.3% from 2.7%, and in 2013 to 2.7% from 3%.
“The economy continues to face serious headwinds that have dampened growth and limited gains in employment,” the report said.
The 1.5% annual pace in the second quarter is equivalent to 0.4% quarter-on-quarter growth.
The Commerce Department said the slowdown reflected weaker consumer spending, which grew by 1.5% in the second quarter, compared with 2.4% growth seen in the first quarter.
It also cited an acceleration in imports for the slowdown in growth.
But it said there that these were partly offset by an upturn in private inventory investment, a smaller decrease in federal government spending, and an acceleration in exports.
Exports of goods and services increased by 5.3% in the second quarter, up from 4.4% in the first three months.
Peter Cardillo, chief market economist at Rockwell Global Capital, said the headline growth number was “a bit better-than-expected, but still the consumption is weak”.
“If the economic data next week continues [to be weak], then probably the market can keep their hopes up that [the] Fed would eventually resort to more stimulus.”
Last month, the US Federal Reserve cut its forecast for economic growth in 2012 to 2.4% from 2.9%.
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