BUSINESS US stocks extend rally after more dovish Fed tilt

BUSINESS

US stocks extend rally after more dovish Fed tilt

AFP

22:18, June 05, 2019

Wall Street stocks rose early Wednesday, shrugging off weak private-sector hiring data and extending a rally following more dovish Federal Reserve statements.

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Traders on the floor of the New York Stock Exchange (File photo: AFP)

Comments from Fed officials this week have opened the door to a possible interest rate cut, enabling investors to shift focus from ongoing trade conflicts that have dented sentiment.

About 15 minutes into trading, the Dow Jones Industrial Average stood at 25,448.90, up 0.5 percent.

The broad-based S&P 500 advanced 0.4 percent to 2,813.61, and the tech-rich Nasdaq Composite Index also climbed 0.4 percent to 7,558.78.

Payrolls firm ADP estimated that US companies added just 27,000 new jobs in May, a fraction of the expected figure and the weakest result in more than nine years. 

The report comes ahead of Friday's more closely-watched Labor Department employment report.

But investors have cheered comments from Fed Chair Jerome Powell on Tuesday that acknowledged the economic risks connected to trade wars and said the Fed was willing to act if needed to support growth.

A day earlier another voting member of the Fed's policy-setting committee said he expected an interest rate cut may be warranted soon.

Powell's remarks lifted major US indices on Tuesday by more than two percent.

Among individual companies Wednesday, cloud computing company Salesforce surged 3.3 percent after reporting a 14 percent jump in quarterly profits to $392 million on higher sales.

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