NEW YORK – US stocks surged 1 per cent on Thursday (Sep 15) as fresh economic data came in weaker than expected, dimming the odds of a rate hike by the Federal Reserve next week.
Apple shares jumped for the fourth straight session in anticipation of strong sales of its new iPhone 7 models to hit the stores Friday.
At the close, the Dow Jones Industrial Average was up 177.71 points (0.99 per cent) at 18,212.48.
The broad-based S&P 500 rose 21.49 points (1.01 per cent) at 2,147.26, while the tech-rich Nasdaq Composite Index, anchored by Apple, gained 75.92 points (1.47 per cent) to 5,249.69.
Wall Street trade had been tentative in recent days with the possibility that the Fed could decide next Wednesday to tighten monetary policy by raising its benchmark interest rate.
But it took a poor report Wednesday morning on retail sales in August, and another showing no added inflationary pressure last month in wholesale prices, as signs of weak economic growth and reason to believe the Fed would hold off.
“You had very weak retail sales numbers, clearly the biggest numbers today. That encouraged investors that September is off the table, that’s the main reason for the rally today,” said Alan Skrainka of Cornerstone Wealth Management.
Apple shares finished up 3.4 per cent at US$115.56, taking its gain since last Friday’s close to 12.1 per cent as reports point to the iPhone 7 being already sold out in pre-orders ahead of Friday’s debut in stores.
Also helping Apple is Samsung’s overheating and fire problems with its Galaxy Note 7 phone, which was officially recalled by the US Consumer Product Safety Commission after the stock markets closed Thursday.
Other strong gainers Thursday included Intel, up 2.6 per cent, and Microsoft, which added 1.7 per cent.
Wells Fargo Bank fell again, by 0.8 per cent, amid reports that Federal prosecutors have begun a probe into the its bogus accounts scandal.
The investigation, which is at an early stage, is looking at whether senior bankers directed lower-ranking employees to falsify documents in conjunction with two million accounts that were opened without customer knowledge, The Wall Street Journal reported.