Wall St rallies as Putin backs off, lifts mood

Specialist Jason Hardzewicz, left, and trader Michael Zicchinolfi work on the floor of the New York Stock Exchange. File photo / AP
Specialist Jason Hardzewicz, left, and trader Michael Zicchinolfi work on the floor of the New York Stock Exchange. File photo / AP

Wall Street rallied overnight, pushing the Standard & Poor's 500 Index to a record high, as Russian President Vladimir Putin said he would not invade Ukraine for now, easing concern the crisis would escalate into an international conflict.

"Clearly Putin would like to lower some of the rhetoric," Paul Denoon, who oversees US$29 billion of emerging-market debt at New York-based AllianceBernstein Holding, told Bloomberg News. "But I don't think he's signalled a new direction in his intentions. We still think there's a risk of escalation."

In afternoon trading in New York, the Dow Jones Industrial Average rose 1.34 per cent, the Standard & Poor's 500 Index gained 1.42 per cent, while the Nasdaq Composite Index climbed 1.80 per cent. The S&P 500 climbed as high as a record 1,873.27.

Gains in shares of Walt Disney, up 2.9 per cent, and those of American Express, up 2.1 per cent, propelled the Dow higher.

All 30 stocks in the index advanced.

Bonds fell, as the need for perceived safe-haven investments dropped. Yields on the US 10-year bond climbed seven basis points to 2.67 per cent.

"Our investment process thesis long-term has not changed," Tom Stringfellow, president and chief investment officer of San Antonio-based Frost Investment Advisors, told Bloomberg News. "I am still an optimist that GDP growth will be higher than what downward revisions are. There are underpinnings in the economy that are churning along."

Shares of Qualcomm advanced, last up 3.8 per cent, after the company increased its dividend and its buyback plan.

Shares of JC Penney jumped, last up 6.2 per cent, after Standard & Poor's upgraded the retailer's outlook to stable from negative, citing "modest improvements during the fourth quarter."

Shares of RadioShack sank, down 14.7 per cent, after the company reported sales that fell far short of analysts' estimates and said it plans to close as many as 1,100 of its US stores.

The "results were much worse than we anticipated, and cast serious doubt on RadioShack's long-term viability in our opinion," BB&T Capital Markets analyst Anthony Chukumba told Reuters.

In Europe, the Stoxx 600 Index finished the day with a 2.1 per cent increase from the previous close. The UK's FTSE 100 rose 1.7 per cent, while France's CAC 40 and Germany's DAX both gained 2.5 per cent.

The rebound was paced by companies that generate a significant percentage of their sales in Russia, Reuters reported.

Shares of Finnish tyre maker Nokian Renkaat rose 3.6 per cent, while those of Austrian lender Raiffeisen Bank International gained 5.8 per cent. The two companies derive respectively 26 per cent and 22 per cent of their overall revenues from Russia, according to data from MSCI.

- BusinessDesk

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