Wall Street hits a four-year high amid hopes central banks will boost economies
Shares on Wall Street jumped to their highest level in four years yesterday, as hopes that central banks around the world would soon take action to stimulate their economies continued to propel US stock markets upwards.
The Standard & Poor's 500 index hit 1,422.46 in afternoon trade, taking its rise this month to nearly 3 per cent, helped in part by a perceived new urgency in Europe to overcome its debt crisis.
The improving investor sentiment was further underlined as interest rates on US Treasury bonds increased from 2.92 per cent to 2.98 per cent, after rising share prices undermined the safe-haven appeal of US government debt.
Wayne Kaufman, the chief market analyst at John Thomas Financial in New York, said: "I am looking for new highs in the major indexes. Overall there is no one major negative that's out there right now that people are scared of."
Shares in Europe also rose, extending a four-week rally, as investors bet that the European Central Bank (ECB) will soon start buying Spanish and Italian bonds to help lower their borrowing costs.
Germany's DAX index rose by 0.8 per cent, France's CAC-40 by 0.9 per cent and Britain's FTSE 100 ended the day 0.6 per cent higher.
However, despite the buoyant stock markets, trading volumes were light ahead of next month's central banks meetings when politicians are expected to take action to ease Europe's debt crisis and boost the economy.
Traders hope politicians have a new-found resolve to overcome the eurozone's block's debt crisis, which may allow Greece to remain in the single currency and keep the 17-member region from unravelling.
Antonis Samaras, the Greek prime minister, will meet the German Chancellor Angela Merkel, French president François Holland and Eurogroup head Jean-Claude Juncker in the next few days to try to secure more funding from the European Union, International Monetary Fund and ECB.
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