YEREVAN, May 31. /ARKA/. Stocks posted some modest gains Thursday after a run of unspectacular U.S. economic data eased concerns that the Federal Reserve will start to reduce the amount of financial assets it buys each month.
The advances on Wall Street and European exchanges came after figures showed U.S. economic growth in the first quarter downgraded to an annualized rate of 2.4 percent from 2.5 percent, weekly jobless claims surprisingly up 10,000 and pending home sales rising by far less than anticipated in April.
Developments surrounding the U.S. economy are being closely monitored in financial markets. Investors are trying to work out when Fed policymakers will start to withdraw some of the stimulus programs they have backed over the past few years in an attempt to lower long-term interest rates and shore up the U.S. economic recovery.
New money generated by the programs has found its way into financial markets and given assets, such as stocks, a big push. A slowing-down in that process — what is known as tapering — has raised concerns among some investors, even though it would herald that the U.S. economy is returning to where it was before the financial crisis of 2008.
Thursday’s figures weren’t a disaster by any means but they did indicate that the U.S. economy is still not operating at the necessary tick for a change in Fed policy — in the current trading environment, that often means gains in stock markets and weakness in the dollar.
“Today’s U.S. data is mildly soft in tone,” said Nick Bennenbroek, an analyst at Wells Fargo Bank.
In Europe, the FTSE 100 index of leading British shares rose 0.5 percent to close at 6,656.99 while Germany’s DAX rose 0.8 percent at 8,400.20. The CAC-40 in France rose 0.6 percent at 3,996.31.
In the U.S., the Dow Jones industrial average was up 0.5 percent at 15,374.02 while the broader S&P 500 index rose 0.6 percent to 1,658.57. –0–
