Wall Street jumps as much as three pct

NEW YORK, Aug 4 (Bernama) -- US stocks rose as much as 3 per cent Wednesday, with the Big Tech sector leading the rally, as investors overcame talk of more stiff rate hikes by the Federal Reserve to focus on solid growth in the services sector and factory orders, reported Sputnik.

Shares of retail and travel companies rose as well as the Institute of Supply Management reported that its ISM services index climbed to 56.7 in July from 55.3 the prior month, topping economists’ forecasts for a reading of 53.5.

US factory orders also impressed – another sign of the economy chugging along. June factory orders rose 2 per cent, versus the prior month’s upwardly revised reading of 1.8 per cent.

The services and factory data offset concern that the Federal Reserve might be considering a third straight rate hike of 75 basis points for September amid signs that wage pressures are not receding from a burgeoning jobs market.

After four rate hikes since March that brought key lending rates from nearly zero to as high as 2.5 per cent, the Fed is nonplussed that inflation, as measured by the Consumer Price Index, has not budged from four-decade highs, growing at a pace of 9.1 per cent in the year to June.

The US is technically in a recession after experiencing two quarters of negative GDP growth in the first half of the year. Most Fed officials, however, dismiss the notion that the US economy is in trouble.

“The economy doesn't look bad at all,” commented online trading platform OANDA analyst Ed Moya concurring with the central bank’s officials. But Moya added that it seems way too early to say that a 75 basis point increase of the interest rate is off the table.

At the close of Wednesday’s trading, the Nasdaq Composite Index, which comprises marquee names in technology such as Amazon, Apple, Netflix and Google, rose 2.6 per cent.

The S&P 500 index, which represents the top 500 US stocks, finished up 1.6 per cent.

The Dow Jones Industrial Average, which comprises stocks of 30 large US corporations, settled up 1.3 per cent.

-- BERNAMA