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. Last Updated: 07/27/2016

Dow Soars Amid Hope Of Rate Cut

The U.S. stock market's historic rally has gained strength amid investor hopes for an imminent cut in interest rates, as the Dow Jones industrial average made its biggest leap in eight months to another record high.


Less than 24 hours after it rushed past the 5,300 level for the first time, the Dow Jones Industrial Average neared 5,400 by soaring 76.23 points Tuesday.


It was the widely watched measure's biggest one-day point gain since May 31, 1995 and its fifth record high in the past seven sessions. The Dow ended the day at 5,381.21.


Wall Street's record close gave a boost Wednesday to European stocks, where an upward spurt in the markets was helped by a bigger-than-expected cut in German money market rates.


The biggest surge was in Frankfurt, where shares soared to a new trading high by midday. Stocks in London and Paris also showed healthy increasesn


U.S. investors bid stocks higher on expectations that the Federal Reserve Board's policy-making panel, which was to end a two-day meeting Wednesday in Washington, would vote to shave interest rates further to bolster the sluggish national economy.


The central bank did just that only a month ago, helping cap a remarkable 1995 in the financial markets that saw key stock indexes gain 30 percent or more.


But data released since December -- including reports Tuesday on retail sales and consumers' confidence -- have signaled continued weakness in the economy. So investors were betting the Federal Reserve panel, called the Federal Open Market Committee, would reduce rates yet again.


Even so, some major U.S. corporations have continued to report profits that have pleasantly surprised Wall Street. On Tuesday, General Motors Corp., the nation's largest industrial enterprise, posted a 19 percent increase in fourth-quarter earnings to a record $1.9 billion, exceeding analysts' forecasts.


However, it's the prospect of another round of interest-rate declines and the economy's sluggishness that have mostly lifted the stock market.


(LAT, Reuters)





The Commerce Department reported that U.S. retail sales during December rose a meager 0.3 percent from November, despite the holiday shopping season. That followed actual sales declines in the fall.


In addition, the Conference Board - a private business research group - said its index measuring consumers' confidence in the economy plunged 12 points in January to 87, the lowest level since it stood at 86.7 in March, 1994.