NEW YORK _ US stock indexes rose Thursday morning, led by banks and other financial companies which stand to make bigger profits with expectations of higher interest rates on the way. The dollar continued to climb against other currencies after the Federal Reserve raised its forecast for interest-rate increases next year.
KEEPING SCORE: The Standard & Poor’s 500 index rose 10 points, or 0.5 per cent, to 2,263 as of 10 a.m. Eastern time. The Dow Jones industrial average rose 91 points, or 0.5 per cent, to 19,883. Nasdaq Composite rose 29 points, or 0.5 per cent, to 5,466.
GO GREENBACK: The ICE U.S. Dollar index, which tracks the value of the dollar against the euro, Japanese yen and four other currencies, jumped more than 1 per cent and touched its highest level since 2002.
The dollar’s value has been generally climbing since 2014 because the U.S. economy seemed to be in better shape than those in Europe, Japan and elsewhere, even though U.S. growth was still only modest. It’s jumping more now after the Federal Reserve on Wednesday raised short-term interest rates and forecast three more increases next year.
The dollar rose to 118.36 Japanese yen from 116.37 late Wednesday, which follows a 1 per cent jump from the day before. The euro fell to $1.0436 from $1.0557, and the British pound fell to $1.2484 from $1.2596.
BANKING ON BIGGER PROFITS: Financial stocks in the S&P 500 jumped 1.6 per cent, far more than any of the other 10 sectors that make up the index. Higher interest rates could help banks reap bigger profits from making loans. Bank of America jumped 55 cents, or 2.4 per cent, to $23.22, and Wells Fargo rose $1.22, or 2.2 per cent, to $55.97
DIVIDEND APPEAL DULLED: Stocks that pay big dividends dragged behind the rest of the market on fears that higher interest rates will push income investors away from them and into bonds. Utility stocks in the S&P 500 fell 0.5 per cent, and real-estate stocks dipped 0.4 per cent.
BREACHED: Yahoo fell $1.30, or 3.2 per cent, to $39.61 after disclosing a breach that affected more than a billion user accounts, the largest such attack in history.
MARKETS ABROAD: In Europe, Germany’s DAX rose 0.5 per cent, France’s CAC 40 gained 0.6 per cent and Britain’s FTSE 100 inched up 0.1 per cent. In Asia, Japan’s Nikkei 225 index gained 0.1 per cent, Hong Kong’s Hang Seng fell 1.8 per cent and South Korea’s Kospi was virtually flat.
ENERGY: Benchmark U.S. crude fell 68 cents, or 1.3 per cent, to $50.36 a barrel on the New York Mercantile Exchange. Brent crude, the international standard, fell 38 cents to $53.52 a barrel in London.
METALS: Gold sank $32.30, or 2.8 per cent, to $1,131.40 per ounce. Silver sank $1.13, or 6.5 per cent, to $16.09 an ounce and copper slipped 1 cent, or 0.1 per cent, to $2.60 a pound.