Markets keep rising after Dow hits record high
An investor looks at the stock bulletin board at a private securities company on Wednesda...
CARLO PIOVANO, AP
Wed Mar 6, 2:44 PM UTC
LONDON (AP) — The Dow's new all-time high and better economic data from the United States propelled world markets Wednesday, with European stocks hitting a four-year high.
Investors are cheered by major central banks' commitments to keep supporting growth in the world biggest economies — the U.S., China, the 17-country eurozone, Japan and Britain.
That has helped them look past political trouble in Washington, where automatic government budget cuts took effect last week after President Barack Obama and Congress failed to reach a budget deal. The $85 billion in cuts are expected to hurt U.S. economic growth, but for now investors seem happy to buy further into the market rally.
European shares added to gains reaped a day earlier, when the Dow posted a new record. Britain's FTSE 100 rose 0.4 percent to 6,455.63 while Germany's DAX advanced 1.1 percent to 7,959.10. France's CAC-40 added 0.2 percent to 3,795.17.
A broader measure of European stocks, the Stoxx Europe 600, rose to its highest level since June 2008.
Wall Street also showed no signs of slowing, with the Dow rising another 0.3 percent on the open, to 14,293.76 and the broader S&P 500 adding 0.3 percent to 1,544.13.
The new gains were fueled by a strong hiring survey by private payrolls company ADP. It showed hiring in the private sector continued in February at a strong pace of 198,000, suggesting the official monthly figure, due Friday, will meet market hopes. Economists expect the U.S. economy added 152,000 jobs in February.
Earlier in Asia, Japan's benchmark index reached a multi-year closing high, capping a day of positive trade in the region. The Nikkei 225 jumped 2.1 percent to close at 11,932.27, the highest finish since September 2008.
Hong Kong's Hang Seng added 1 percent to 22,777.84. South Korea's Kospi rose 0.2 percent to 2,020.74. Australia's S&P/ASX 200 advanced 0.8 percent to 5,116.80. Benchmarks in Singapore, Taiwan, Indonesia and mainland China rose.
Ric Spooner, chief market analyst at CMC Markets, said the new highs reached on Wall Street provided a psychological boost to investors but that such gains can go into reverse pretty quickly.
"From the big picture point of view, there is a lot of risk in either direction for the stock market at the moment," he said. "But we could quite easily continue rising, given how low interest rates are."
Federal Reserve chairman Ben Bernanke has recently suggested that the central bank would continue its campaign of massive bond-buying, known as "quantitative easing," to support the world's biggest economy. The issuance of bonds has pushed their prices down, steering investors toward stocks.
"The lesson is clear. Don't bet on Capitol Hill. Bet on Fed Chairman Ben Bernanke instead. To be sure, it was Bernanke's reassurance, as last week's congressional testimonies on monetary policy, to keep QE3 on its present course that turned a worried stock market into a record high," said analysts at DBS Bank Ltd. in Singapore.
Meanwhile, Japan's central bank is expected to sharply loosen its monetary policy to get the economy growth after two decades of stagnation. Chinese authorities have committed themselves to their economic growth target, while the European Central Bank is expected to leave interest rates at record lows for the foreseeable future.
In commodity markets, the benchmark oil contract for April delivery was down 28 cents to $90.54 per barrel in electronic trading on the New York Mercantile Exchange. The contract rose 70 cents on Tuesday, hours after the death of Venezuelan President Hugo Chavez, whose country sits on the world's second-largest oil reserves, after Saudi Arabia.
In currencies, the euro shed 0.3 percent against the dollar, to $1.3019, while the dollar rose 0.3 percent against the Japanese yen, to 93.53 yen.
Pamela Sampson in Bangkok contributed to this report.