THE NEW YORK REPORT
A broad US stocks rally sent the Dow industrials to a 13-month high last night, after the Group of 20 pledged to keep aid flowing to the world economy, strengthening investors’ desire for risk.
The agreement by G20 finance ministers and central bankers over the weekend to keep stimulus in place boosted global stocks on the expectation of prolonged low interest rates.
The US dollar briefly fell to a 15-month low, bolstering commodity prices and materials stocks.
Freeport MacMoRan Copper & Gold shares shot up 4.6 per cent to $83.20 and the S&P materials sector index gained 3.2 per cent.
“Central banks around the world are continuing to prop up the economy and support risk taking. There’s very little regard for valuation,” said Jack Ablin, chief investment officer of Harris Private Bank.
“It looks to me like a pure risk rally and it is consistent with the G20 comments.”
Shares of chipmakers rose sharply, with the PHLX semiconductor index up 3.2 per cent, the largest increase it has seen in around a month. And yesterday, Wells Fargo raised its 2010 growth projection figures for chipmakers.
Among chipmaker shares, Applied Materials rose 5.2 per cent to $12.98 on Nasdaq and Micron Technology shot up 6.1 per cent to $7.51 on the New York Stock Exchange.