S&P rises above 2000; European Stocks extend Gains
The Standard and Poor’s 500 Index reached record levels yesterday as it ended the trading session above 2000 for the first time in its history. The index added 0.11% at the close of the session. This came on the back of very positive data relating to the durable-goods order figures, as well as increased consumer confidence. The increase of 23% in July in the number of durable-goods orders was also the largest to date. This movement was significantly affected by a jump in order bookings for commercial aeroplanes.
The Dow Jones Industrial Average was also in positive territory, adding 0.17%, to close at 17106.7. The index also reached an all-time intraday high throughout the day’s trading. Meanwhile the Nasdaq ended its session at 4570.64, adding 0.29% of value. One may point out that the additional value to all three major indices being experienced may be down to further speculation that policy makers will keep interest rates unchanged for the time-being even though the economy has been showing increasing signs of strength.
Consumer confidence in the US is also on the increase according to the Conference Board’s consumer confidence Index. This month’s August reading saw the index rise to 92.4, the highest level since October 2007. The revised reading for July was that of 90.3.
The major European indices all traded in positive territory yesterday. The closely followed Euro Stoxx 50 added just over 1% to its value, closing at 3197.54. The French CAC 40 increased by 1.18% to 4393.41 whilst the German DAX rose by 0.82% to 9588.15. A significant increase which surpassed these indices was experienced by the Spanish IBEX 35. This index added 1.28% to end its trading session at 10826.90. Yesterday’s session meant that the European indices successfully managed their largest two-day gains in four months. Banks played a major role in this as there was increased speculation that the Euro area will see the introduction of an asset-purchase program. This speculation has been affected by Mario Draghi’s speech in Jackson Hole. Draghi has hinted that the option of quantitative easing will remain open in the near future. A reduction in concern over the Ukrainian crisis affecting world trade also played a factor in the increasing value of the indices.
Amazon.com registered an increase of 2.3% in its share value, reaching $341.81. This came after news broke that the firm will be purchasing Twitch Interactive Inc, a video-game service company which is an online gathering place for gamers. If the deal goes through, this will be one of Amazon’s largest acquisitions to date giving it more than 55 million monthly active users.
Burger King Worldwide
The Burger King Company has agreed to purchase the coffee and doughnuts chain, Tim Hortons Inc, in a bid to move into the breakfast business. This news led Tim Horton’s shares to rise by 8.5% reaching $81.05. Burger King will also seek to move its headquarters to Canada, thus relocating to a lower-tax country.
BNP Paribas and SocGen both added more than 1% to their share value with the banks being a major contributor to the Stoxx 600’s recent gains. BNP’s share price stood at €51.30 adding 2.1% whilst Societe Generale rose 1.7% to close off at €39.32
South Africa’s largest clothing retailer is turning to international brands such as Topshop and Tom Tailor in a bid to improve its profit figures, seven years after being acquired in a leveraged buyout. The company’s aim is to add more labels to product range. It intends to do this through its flagship Edgars stores. The company is facing increasing competition from Zara and Hennes & Mauritz.
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