Dow and Nasdaq soar on stable US consumer prices
Thursday 17 June 1999
The US consumer price index stood unchanged in May, the US Labor Department reported. In April, the index increased by 0.7 per cent, which scared markets into believing that an increase in interest rates was just around the corner. The markets took heart from May's shift, and the Dow Jones Industrial Index soared to close up 189.96 points at 10,784.95 yesterday. The technology-intensive Nasdaq index had its strongest one-day gain ever in points, ending up 103.17, or 4.27 per cent, at 2,517.84.
The inflation figure was distorted by a sudden fall in oil prices in May, after an equally sudden rise in April. Stripped of energy and transport components, the outlook for inflation remains as it was, with moderate price rises that show no signs of precipitating a wage-price spiral.
The index for all items except the volatile food and energy component rose by 0.1 per cent in May. Food prices rose by 0.4 per cent, and medical care and recreation costs rose a moderate 0.2 per cent.
"The deceleration in May reflects downturns in the indices for apparel, for tobacco and smoking products, and for airline fares, coupled with a smaller increase in shelter costs," the Labor Department said.
The US Federal Reserve indicated at its last meeting that it had shifted its policy towards tightening interest rates. Its next meeting is on 29 June, and most market participants still to expect a rise in rates. Today will give an indication of the Fed's stance when Alan Greenspan, the chairman, addresses Congress on the economy.
Mr Greenspan has indicated that labour market trends are of more concern at the moment than prices, as unemployment continues at very low levels.
US long-term interest rates have been rising steadily since December, and the yield on the benchmark 30-year US Treasury bond still seems to indicate a growing anticipation of an interest-rate rise. However, the 30-year Treasury bond fell to 6.03 per cent from 6.08 per cent.
Outlook, page 19
- 1 Humans of New York image of crying gay teen receives best response yet from Ellen DeGeneres
- 2 What supermodels really think about posing in the nude
- 3 People all over the world are getting semicolon tattoos to draw attention to mental health
- 4 Black teen in critical condition after store employee 'shoots him for stealing 79-cent pack of cookies'
- 5 Chris Moyles reportedly set to make radio comeback with new breakfast show on XFM
Humans of New York image of crying gay teen receives best response yet from Ellen DeGeneres
Swedish minister gives strongest case yet on why EU should stop turning away asylum seekers
North Korean defector flees to Finland 'with evidence of chemical testing on humans'
Isis schoolgirl Amira Abase who fled London to join terrorists in Syria mocks victims of Tunisia massacre
Father faces deportation to Thailand after 27 years in Britain for two 'stupid crimes'
More Britons believe that multiculturalism makes the country worse - not better, says poll
Nathan Collier: Montana man inspired by same-sex marriage ruling requests right to wed two wives
Greece crisis: IMF was pushed around by Angela Merkel and Nicholas Sarkozy – and now it is being humiliated
Osborne to cap family benefits at £23,000 – announced ahead of his post-election Budget
Forget little green men – aliens will look like humans, says Cambridge University evolution expert
Girl, 7, stares down hate preacher at Ohio festival with pro-LGBT rainbow flag gesture
iJobs Money & Business
£15000 - £17000 per annum: Recruitment Genius: This company offers a range of ...
£15000 - £16000 per annum: Recruitment Genius: Customer Service Advisors are r...
£20000 - £25000 per annum + OTE £45K: SThree: SThree were established in 1986....
£40000 - £60000 per annum: Recruitment Genius: A Compliance Manager is require...