U.S. stocks had a good day on June 25, pushed higher as global markets responded to news of strong U.S. economic data.
Strong U.S. economic data reported
Data provided by the Commerce Department indicates that in May, orders for durable goods surged 3.6 percent, according to MarketWatch. In addition, a separate report provided by the government agency indicate that during the month, sales of new homes rose 2.1 percent.
"For the first time in this current cycle, we've looked at good economic data as good news," Art Hogan, market strategist at Lazard Capital Markets LLC, told the news source. "If we continue to get the market reacting positively to good economic data, we've gotten to the place we should be."
The S&P 500 Index, a benchmark group of stocks, had a strong day, rising 0.9 percent to close at 1,587.88 at 4 p.m. in New York, according to Bloomberg. The gain comes after the index plunged 5.8 percent in the last several weeks after reaching an all-time high on May 21.
Impact of Fed statements
The recent decline that the index has suffered has been attributed by many to the recent Federal Reserve statements that QE could be reduced in 2013 and possibly cut off altogether in 2014. Federal Reserve Chairman Ben Bernanke indicated that the voting members of the Federal Open Market Committee were thinking about paring down the program in 2013 when speaking with members of the media immediately following the Federal Open Market Committee meeting.
The Federal Reserve is currently buying $85 billion worth of debt-based assets every month, and has been purchasing securities at this rate since late 2012.
"People are still digesting the news from the Fed, making mental adjustments for different levels of interest rates and what those might imply for securities' prices over the next several quarters," John Carey, fund manager at Pioneer Investment Management Inc. in Boston, told the news source by telephone. "I'm encouraged the market has stabilized a little here."
Witold Bahrke, who contributes to the management of $55 billion as a senior strategist at Copenhagen-based PFA Pension A/S, wrote in an e-mail that the global asset markets were pushed higher by QE, according to Bloomberg. As a result, reducing and then eliminating this economic stimulus will have an impact on asset markets.
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