Share

Summers pullout from Fed race boosts Dow

New York - US stocks mostly gained on Monday helped by news that Larry Summers, perceived as in favor of tighter monetary policy, pulled out of the race to lead the Federal Reserve.

The Dow Jones Industrial Average and the S&P 500 both gained, but large drops by Nasdaq giants Apple (-3.2%) and Facebook (-3.0%) dragged the Nasdaq Composite lower.

The Dow finished up 118.72 points at 15 494.78.

The broad-based S&P 500 gained 9.61 points at 1 697.60, while the Nasdaq Composite lost 4.33 points at 3 717.85.

Analysts credited both the US-Russia pact to eliminate Syria's chemical weapons and Summers removing himself from contention to be chairperson of the Fed.

Many analysts believed that President Barack Obama now would pick Fed vice-chair Janet Yellen, a monetary dove, to replace Ben Bernanke at the end of January.

"The more constructive tone to the markets reflects the belief that the pace of tapering will be slower under a Yellen (Fed) than under Summers," said Steven Ricchiuto, chief US economist at Mizuho Securities.

However, he cautioned, Yellen's nomination is no certainty; Obama could opt for another candidate, with speculation focused on former Fed officials who could be more hawkish on tightening policy than Yellen.

"As such, we are not convinced that this is a turning point for the markets," he said.

Boeing shares led the Dow gain, rising 3.9% on reports that the aircraft maker's bid outpaced rivals in a $7.6bn deal to supply fighter jets to South Korea.

Packaging and paper maker Boise jumped 26.1% after Packaging Corporation of America set a $2bn deal to take over the company. Packaging Corp gained 10.8%.

Apple shares appeared to continue sinking on the disappointments in its new iPhones launched last week and its China strategy for them.

Facebook came off its recent highs as investors awaited rival Twitter's IPO.

China's Qihoo 360 fell 5.6% on profit taking from last week's peak.

Bond prices were mixed. The yield on the 10-year Treasury dropped to 2.87% from 2.90% on Friday, while the 30-year rose to 3.87% from 3.85%. Prices and yields move inversely.

bur-pmh/vs

We live in a world where facts and fiction get blurred
Who we choose to trust can have a profound impact on our lives. Join thousands of devoted South Africans who look to News24 to bring them news they can trust every day. As we celebrate 25 years, become a News24 subscriber as we strive to keep you informed, inspired and empowered.
Join News24 today
heading
description
username
Show Comments ()
Rand - Dollar
18.91
+0.1%
Rand - Pound
23.87
+0.1%
Rand - Euro
20.38
+0.2%
Rand - Aus dollar
12.31
+0.2%
Rand - Yen
0.13
+0.1%
Platinum
908.05
+1.2%
Palladium
1,014.94
0.0%
Gold
2,232.75
-0.0%
Silver
24.95
-0.1%
Brent Crude
87.00
+1.8%
Top 40
68,346
0.0%
All Share
74,536
0.0%
Resource 10
57,251
0.0%
Industrial 25
103,936
0.0%
Financial 15
16,502
0.0%
All JSE data delayed by at least 15 minutes Iress logo
Company Snapshot
Editorial feedback and complaints

Contact the public editor with feedback for our journalists, complaints, queries or suggestions about articles on News24.

LEARN MORE
Government tenders

Find public sector tender opportunities in South Africa here.

Government tenders
This portal provides access to information on all tenders made by all public sector organisations in all spheres of government.
Browse tenders