Wall Street rallies on optimistic Fed remarks, strong euro

12:41, June 16, 2010      

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Wall Street rallied on Tuesday, lifted by upbeat remarks from Fed officials, positive economic reports and a stronger euro.

Major indexes were climbing to their morning highs after Fed official James Bullard said the global economy was not in danger of a double-dip recession.

Bullard, the president of the Federal Reserve Bank of St. Louis, said on Tuesday that the global economy isn't in a double-dip recession, despite the challenges of the eurozone sovereign-debt crisis. He also pointed out that austerity measures in Europe could be good for the economy in the mid-term.

The euro strengthened against the dollar, rising to as high as 1.2349 dollars, which was favorable for the equities as investors regarded the 16-nation common currency as the barometer of confidence about European economy.

The Federal Reserve Bank of New York earlier said its Empire State Manufacturing index rose to 19.6 in June from 19.1 in May, remaining solidly in positive growth territory. The data showed manufacturing sector was still leading the U.S. economy out of the worst recession since the 1930s.

Investors shrugged off news that Fitch Ratings cut BP's long- term credit ratings to "BBB" from "AA," saying the company faced a greater risk that financial obligations will need to be paid sooner rather than later. Shares of BP PLC rose 73 cents or 2.38 percent to 31.40 dollars.

Technology stocks got a boost after a report said the personal computer market will grow 20 percent this year.

The Dow Jones industrial average rose 213.88, or 2.10 percent, to 10,404.77. The Standard & Poor's 500 index gained 25.60, or 2. 35 percent, to 1,115.23 and the Nasdaq was up 61.92, or 2.76 percent, to 2,305.88.

Source: Xinhua


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