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U.S. stocks open higher as Fed news supports; Dow Jones up 0.09%

Published 09/19/2013, 09:37 AM
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Investing.com - U.S. stocks opened higher on Thursday, after the release of better-than-expected U.S. jobless data and as the Federal Reserve's decision to hold its stimulus program boosted market sentiment.

During early U.S. trade, the Dow Jones Industrial Average edged up 0.09%, the S&P 500 index added 0.27%, while the Nasdaq Composite index gained 0.34%.

The Department of Labor said the number of people who filed for unemployment assistance in the U.S. in the week ending September 13 rose by 15,000 to a seasonally adjusted 309,000 from an upwardly revised 294,000 the previous week.

Analysts had expected the number of people who filed for unemployment assistance to rise by 36,000 to 330,000 last week.

A separate report showed that the U.S. current account deficit narrowed to USD98.9 billion in the second quarter, from an downwardly revised deficit of USD104.9 billion in the three months to March. Analysts had expected the current account deficit to improve to a USD97 billion.

The data came a day after the Fed held back from reducing the USD85 billion pace of its monthly asset purchases.

Bernanke refused to commit to reducing bond purchases this year, saying the stimulus program was "not on a preset course."

Commodity-linked stocks were active, as the Fed's policy statement sent commodity prices broadly higher. Shares in Royal Gold jumped 1.09% at the open of the U.S. trading session, while Freeport-McMoRan copper and gold mining company rallied 1.13%.

In the financial sector, Wells Fargo climbed 0.58% after saying it is eliminating about 1,800 more jobs in its home-loan production business seeing as rising mortgage rates are weighing on borrowers’ demand for refinancing.

Separately, JPMorgan Chase shares were up 0.17%, amid reports the U.S. lender is expected to pay about USD900 million to settle U.S. and U.K. claims that lax internal controls led the bank to provide inaccurate information about last year’s record trading loss to the board.

Elsewhere, Apple shares surged 1.45% after first reviews of the new iPhones released on Wednesday showed mostly positive reactions for the 5C and 5S.

Blackberry shares trended lower however, slipping 0.18%, after the Wall Street Journal reported that the smartphone maker is preparing to lay off up to 40% of its staff by the end of the year.

Other stocks likely to remain in focus included ConAgra and Rite Aid, scheduled to report quarterly earnings later in the day.

Across the Atlantic, European stock markets were sharply higher. The EURO STOXX 50 rallied 1.21%, France’s CAC 40 jumped 0.94%, Germany's DAX gained 0.92%, while Britain's FTSE 100 surged 1.45%.

During the Asian trading session, Hong Kong's Hang Seng Index jumped 1.67%, while Japan’s Nikkei 225 Index rallied 1.80%.

Later in the day, the U.S. was to release the Philly Fed manufacturing index as well as data on existing home sales.


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