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While you were sleeping: Dow closes above 17,000 UPDATED

Wall Street's Dow Jones Industrial Average closed above 17,000 for the first time since October 3.

Margreet Dietz
Wed, 29 Oct 2014

Stocks on both sides of the Atlantic advanced amid better-than-expected corporate earnings and US consumer confidence climbing to the highest level in seven years. 

Focus is also squarely on US Federal Reserve policy makers as they started their two-day meeting. The central bank is expected to end its monthly bond-buying program.

Shares of Amgen jumped more than 5% after the company reported third-quarter earnings that surpassed expectations and upgraded its full-year forecast. 

At the close, the Dow Jones Industrial Average was 17,005, the first time it has been above 17,000 since October 3 .

The S&P 500 added 17 points, or 0.8%, to 1978, on pace to gain 0.3% for October. The Nasdaq Composite Index rose 67 points, or 1.5%, to 4553, on track for a 1.3% monthly advance.

Small-cap stocks, energy shares and technology stocks posted the strongest gains, while safe-haven investments such as Treasurys and utility stocks declined.

"Corporate earnings continue to surprise and that has been the wind in the sails of this rebound," King Lip, chief investment officer at Baker Avenue Asset Management in San Francisco, told Reuters.

Also helping was a Conference Board report showing its gauge of US consumer confidence posted its highest reading since October 2007, rising to 94.5 this month.

To be sure, two separate reports were disappointing. Durable goods orders unexpectedly fell, sliding 1.3 percent in September. The S&P/Case-Shiller index of property values increased 5.6 percent in August from a year earlier, down from 6.7 percent in the year ended July. It was the slowest increase since November 2012.

Meanwhile, the US Treasury’s auction of US$29 billion of two-year notes drew a yield of 0.425 percent, the lowest since May, amid expectations the Fed will keep its target interest rate at record lows.

“Lower for longer is the outlook for now,” Larry Milstein, managing director in New York of government-debt trading at RW Pressprich & Co, told Bloomberg News. “That’s why the two-year note is trading below 0.5 percent.”

In Europe, the Stoxx 600 ended the session with a 1 percent increase rom the previous close. France’s CAC 40 rose 0.4 percent, the UK’s FTSE 100 Index gained 0.6 percent, while Germany’s DAX rallied 1.9 percent.

Shares of UBS jumped 5.8 percent after investors welcomed the Swiss bank’s announcement it put aside 1.84 billion Swiss francs (US$1.94 billion) for litigation provisions.

“I think we have seen the peak in litigation costs,” Peter Stenz, a Zurich-based fund manager at Swisscanto Asset Management, told Bloomberg News. “At some point we’ll see light at the end of the tunnel.”

(BusinessDesk)

Margreet Dietz
Wed, 29 Oct 2014
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While you were sleeping: Dow closes above 17,000 UPDATED
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