Positive business earnings increased stock prices in the United States and Europe on Wednesday. As a result, the Dow and Standard & Poor’s 500 reached all-time highs, as the dollar found its highest point in four months on projections that the United States Federal Reserve might raise interest rates by the end of the year. The nice run in large equity markets around the world had investors lower their positions in safe-havens in United States and German government debt, increasing yields. Oil prices dropped to its lowest point in two months before United States data that might indicate whether an oversupply in the top consuming country was decreasing.
“For the rally to sustain we are going to need to see continued improvement in the earnings and economic activity,” Peter Cardillo, chief market economist at First Standard Financial in New York, said.
Shortly after their open, the Dow Jones industrial average .DJI had jumped by 14.72 points, or 0.08 percent, to 18,573.73, the S&P 500 .SPX increased 3.23 points, or 0.15 percent, to 2,167.01 and the Nasdaq Composite .IXIC grew by 27.29 points, or 0.54 percent higher, to 5,063.66. They helped give rise to Europe’s broad FTSEurofirst 300 index .FTEU3, which saw an increase of 0.58 percent to 1,340 points. The MSCI world equity index .MIWD00000PUS, which looks over markets in forty-five countries, jumped 0.65 points or 0.16 percent, to 411.48. Earlier, Japan’s Nikkei .N225 decreased 0.3 percent after seeing gains for a week straight.
Although most global stocks were seeing positive increases, investors scaled back their holdings of low-yielding government bonds with U.S. and German bonds at their highest rates. Benchmark U.S. 10-year Treasury yield US10YT=RR has increased by three basis points to 1.59 percent, as 10-year German Bund yield DE10YT=RR jumped by one basis point to -0.17 percent.