US stock market rallies as fears of recession fall
The release of better-than-expected figures on the US labour market and retail sales has further allayed fears of a looming recession in the world’s largest economy. Tech funds in particular saw their market capitalisation soar on Thursday as a result.
The Dow Jones index ended 1.4 per cent higher at 40,563.06 points. The S&P 500 gained 1.6 per cent to 5543.22 points and Nasdaq rose 2.3 per cent to 17,594.50 points. The indexes were already up slightly on Wednesday, following better-than-expected US inflation data. These reinforced expectations that the Federal Reserve will cut interest rates next month.
Early this month, weak job growth was causing many to fear a recession, but “the wall of anxiety is starting to crumble”, a US Bank analyst said.
Stable spending
The number of weekly applications for unemployment benefits was lower than widely anticipated. As a result, the labour market appears to be in slightly better shape than thought. It was also announced that US retail sales rose 1 per cent in July. This was also better than expected.
Walmart and Cisco Systems were among the strongest risers on Thursday. Walmart, the largest US supermarket chain, spoke of stable consumer spending and posted higher sales and profits last quarter. The group was also more positive about sales and profits for the full financial year. Its shares rose almost 7 per cent.
Cisco Systems climbed just under 7 per cent. The networking equipment manufacturer saw sales and profits fall last quarter, but performed better than analysts had expected. The company intends to cut more jobs to free up money to invest in new products for artificial intelligence, cloud software and cybersecurity. It did not say whether people would lose their jobs at its Amsterdam site.
A trader on the New York Stock Exchange © PHOTO XINHUA/LIU YANAN
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