LONDON — Stocks made some modest gains Friday at the end of a week that’s been dominated by speculation over when the U.S. Federal Reserve will start reducing its stimulus.
Aside from a whopping 13 percent fall in U.S. new home sales in July, there’s been little economic news to drive sentiment. And even that fall, the biggest since May 2010, came after surprisingly strong figures for June. As such, the impact was fairly minimal, but at the margins the figures shored up stocks since they may make the Fed more likely to delay its so-called tapering.
“Traders know the Fed’s tapering clock is ticking and any soft economic data may buy the bulls more time,” said David Madden, market analyst at IG. In Europe, the FTSE 100 index of leading British shares closed up 0.7 percent at 6,492.10, while Germany’s DAX rose 0.2 percent to 8,416.99. The CAC-40 in France ended 0.3 percent higher at 4,069.47.
In the U.S., the Dow Jones industrial average was steady at 14,967, while the broader S&P 500 index was up 0.1 percent at 1,658. Meanwhile, the Nasdaq composite rose 0.3 percent to 3,650, a day after it suffered a major glitch that saw trading closed for most of the afternoon session. Microsoft was the standout stock in the U.S., surging as much as 8 percent after CEO Steve Ballmer said he will retire within the next year.
Stocks, particularly in the U.S., have had a tricky week as investors fretted about when the Fed will begin the so-called tapering of its stimulus. At the moment, it’s buying $85 billion of financial assets a month in order to lower borrowing rates and shore up the U.S. economy.
A run of solid economic data, particularly with regard to the labor market, appears to have convinced policymakers at the Fed that the tapering should begin later this year. The main question appears to be over the exact timing, with investors split between September and December.
Earlier, markets in Asia were a little bit more buoyant as investors continued to breathe a sigh of relief that China’s economy, the world’s second-largest, may have gotten over its soft patch. A survey Thursday by HSBC Corp. showed an expansion in China’s manufacturing in August.
Australia’s S&P/ASX 200 advanced 0.9 percent to 5,123.40, and South Korea’s Kospi added 1.1 percent to 1,870.16. However, Hong Kong’s Hang Seng reversed early gains to close 0.2 percent down at 21,863.51. The index had been the region’s top-performer on Thursday after the Chinese figures.
Japan’s Nikkei 225 index jumped 2.2 percent to 13,660.55 amid speculation that the Bank of Japan’s governor, Haruhiko Kuroda, will reaffirm his support for easy monetary policy at an annual meeting of central bankers in Jackson Hole, Wyoming.
Trading was fairly lackluster in other financial markets, too. Among currencies, the euro was 0.2 percent higher at $1.3395, while the dollar fell 0.1 percent to 98.60 yen.