Dow, S&P 500 hit record highs after ECB stimulus
Saturday, 7 June 2014
NEW YORK, June 6 (AFP): The Dow and the S&P 500 Thursday bolted to new records after the European Central Bank launched aggressive measures to stimulate fragile eurozone growth and avert deflation.
The Dow Jones Industrial Average advanced 98.58 points (0.59 per cent) to 16,836.11 while the broad-based S&P 500 rose 12.58 (0.65 per cent) to 1,940.46. The tech-rich Nasdaq Composite Index posted strong gains, leaping 44.58 (1.05 per cent) to 4,296.23.
US markets reacted enthusiastically to a series of new measures from the ECB, which lowered all three of its key interest rates, including putting the deposit rate into negative territory for the first time, meaning banks will be charged for depositing their excess cash with the central bank.
"Expectations were for them to take action and the market is applauding the action that has been taken," said David Levy, portfolio manager at Kenjol Capital Management.
Analysts said the ECB's new push means liquidity will remain at high levels globally even as the Federal Reserve scales back its asset-purchase stimulus.