By DPA,
New York : US stock indices surged Wednesday as the Federal Reserve said the country’s long recession was ending and upbeat outlooks from Intel and American Express.
The Dow Jones Industrial Average climbed more than three percent and recorded its biggest point gain since March. Financial and technology shares led the Wall Street gains.
The US central bank said its outlook had “improved modestly” since April and the economy “would expand sluggishly over the remainder of the year.” It warned that unemployment could still top 10 percent before the end of 2009.
The Fed pointed to signs that the financial sector, consumer spending and housing markets were all beginning to stabilize. It forecast a contraction of between 1 percent and 1.5 percent – better than its April prediction of a drop of 1.3 percent to 2 percent.
Computer-chip giant Intel handily beat expectations in quarterly results announced Tuesday evening. The world’s largest chipmaker suffered a $398-million loss, primarily because of a $1.45-billion fine levied by the European Union.
American Express, meanwhile, predicted a smaller loss than forecast over the coming year. Fewer people were likely default on credit-card debts than previously expected, despite the ongoing recession.
The blue-chip Dow Jones Industrial Average jumped 256.72 points, or 3.07 percent, to 8,616.21. The broader Standard & Poor’s 500 Index surged 26.84 points, or 2.96 percent, to 932.68. The technology-heavy Nasdaq Composite Index gained 63.17 points, or 3.51 percent, to 1,862.9.
The US currency dropped against the euro to 70.89 euro cents from 71.6 euro cents
Tuesday. The dollar rose against the Japanese currency to 94.32 yen from 93.53 yen.