Stocks Rise on Official’s Stimulus Comments (Bloomberg)
Stocks rose today, with the S&P 500 erasing earlier losses, after Federal Reserve Bank of Atlanta President Dennis Lockhart said central bank officials are committed to record stimulus measures. “There certainly seems to be an acute fixation on the timing of any adjustment to the asset purchase program and I guess I would just encourage everyone to not lose sight of the bigger picture,” Lockhart said. “Any adjustment is not a major policy shift. The high level of accommodation will stay in place.”
A survey today showed that manufacturing picked up slightly last month, even though the pace was sluggish, suggesting that the sector might be a drag on the economy in the second quarter of this year. “The survey paints a downbeat picture of U.S. manufacturing business conditions. Output, order books and employment are all growing modestly, suggesting the sector is at risk of stalling,” said Chris Williamson, Markit chief economist.
The dollar hit a fragile bump today, as investors pared back bets and consolidated last month’s steep gains on the greenback from recent strong economic data. The dollar’s outlook, however, continues to remain upbeat due to growing expectations that the Federal Reserve could reduce its stimulus program. “There was a lot of dollar buying in May partly due to some upbeat U.S. data, and now market participants are stepping back a little bit to capitalize on these gains,” said Brian Kim, currency strategist at RBS Securities in Stamford, Connecticut.