Stocks waver after hitting record highs

AFP | New York

The Daily Tribune – www.newsofbahrain.com

Stock Markets wavered Thursday following record-breaking rallies that were fuelled by cooling US inflation, though Wall Street pushed ahead with the Dow topping the 40,000-point mark mid-session for the first time. The Dow, the broad-based S&P 500, and the tech-heavy Nasdaq built on gains from the day before following an inflation report that revived hopes of Federal Reserve interest rate cuts. The trio of indices pushed 0.3 percent higher, aided by strong Walmart earnings on better-than-expected profits.

“The Guinness Book of World Records will need updating given the performance of stock markets this year,” said Dan Coatsworth, investment analyst with AJ Bell.

“Investors have been pumped up by the latest inflation reading, believing it is cool enough to stir the Federal Reserve into action and cut rates in the near future.”

London -- despite telecoms group BT soaring 17 percent -- Paris and Frankfurt in contrast ended in the red, one day after striking their own records over expectations of rate cuts in the eurozone and the UK.

“Profit-taking is likely to be the main driver behind today’s weakness in stocks,” City Index analyst Fawad Razaqzada told AFP on European trading as there was no major news to send stocks lower.

“European markets have failed to follow the bullish theme set in the United States,” said Scope Markets analyst Joshua Mahony.

Asian equities rallied Thursday after US data showed inflation cooled last month, fuelling speculation that the Federal Reserve will cut interest rates twice this year and sending Wall Street to record heights on Wednesday.

US inflation came in at 3.4 percent in April on an annual basis, down from 3.5 percent in March, data showed Wednesday.

The April reading was in line with forecasts and capped a run of three straight months above estimates that had forced investors to reel in their rate cut hopes.