Stocks gain as Summers quits Fed race
Progress in Syria talks also boosts shares
US stocks and Treasuries rose, and the dollar fell, after Larry Summers withdrew his bid to be the next Federal Reserve chairman and America and Russia agreed on a plan to remove Syria’s chemical weapons. Photograph: David Karp
Stocks and bonds on major markets rallied yesterday after former US treasury secretary Larry Summers withdrew from consideration to be the next chairman of the Federal Reserve, leading investors to believe US monetary policy might stay looser for longer.
Signs of progress in reducing tensions in the Middle East, after a Russian-brokered deal on Syria’s chemical weapons also helped to support stocks and bonds.
Ryanair stock surged 4.2 per cent to €6.41 at the close in Dublin yesterday, boosted by news that the airline has signed a 10-year growth agreement with Stansted Airport. The deal will see Ryanair increase the number of passengers it carries from the London airport by 50 per cent to over 20 million a year. Shares in Grafton Group, which yesterday announced it is to become the latest in a line of Irish public companies to depart the Irish Stock Exchange, jumped 2.2 per cent to finish at €6.90. “The announcement was no great surprise having been flagged in August but the stock was up as a result,” one analyst said.
Glanbia pushed ahead by 2.3 per cent to €9.50 on good volume, with selling pressure on the food group dissipating.
It was also a good day for C&C and CRH which were up 2.3 per cent and 2.2 per cent respectively. The Iseq index rose 68 points or 1.6 per cent to 4,277 in Dublin.
UK stocks advanced, with the FTSE 100 Index closing at its highest level in more than six weeks, as the US and Russia agreed on a deal for Syria to avoid military action by surrendering its chemical weapons.
EasyJet and International Consolidated Airlines increased more than 2 per cent as the price of oil declined on speculation that the threat of imminent military strikes against Syria has eased.
Fresnillo and Polymetal International both plunged more than 7 per cent after the commodity producers were not included in the NYSE Arca Gold Miners Index.
AstraZeneca gained 1.7 per cent as Nordea Bank upgraded the drugmaker to buy from sell, saying investors underestimate the potential of the company’s upcoming drugs.
The FTSE 100 gained 39.06 points, or 0.6 per cent, to 6,622.86 at the close of trading in London.
European stocks gained, extending a five-year high, as Lawrence Summers withdrew from consideration as Federal Reserve chairman, paving the way for Janet Yellen, who investors say will favour slower stimulus reduction.
Hennes & Mauritz advanced 4 per cent to a three-year high after sales topped estimates. Europe’s second-biggest clothing retailer said revenue at stores open at least a year rose 4 per cent in August compared with the same month last year.
Remy Cointreau soared the most in almost four years as Chinese cognac shipments increased. The alcoholic beverage company surged 7 per cent to €84.10 for the biggest gain in the Stoxx 600.
The Stoxx Europe 600 Index rallied 0.6 per cent to 313.42 at the close of trading, the highest level since June 2008.
Germany’s Dax surged 1.2 per cent, while France’s Cac-40 rose 0.9 per cent.
US stocks and Treasuries rose, and the dollar fell, after Mr Summers withdrew his bid to be the next Federal Reserve chairman and America and Russia agreed on a plan to remove Syria’s chemical weapons. Boeing rallied 3.7 per cent in early trading to pace gains among industrial shares after Stern Agee raised its price target.
Lennar and DR Horton climbed at least 4 per cent as housing stocks surged. Apple fell 2.1 per cent, continuing its slide since the latest iPhone was introduced last week.
The Standard & Poor’s 500 Index added 1 per cent to 1,704.29 just after noon in New York, the highest since August 5th. – (Additional reporting: Bloomberg, Reuters)