Wall Street was defiantly upbeat at the start of trading Thursday with the S&P 500 even breaking a new record, and with gold, silver and copper prices all markedly up.
Despite an unpleasant surprise in the form of a rise in the number of Americans filing for unemployment benefits last week, investors remained focused on Ben Bernanke’s comments yesterday that monetary policy will remain accommodative for the foreseeable future.
The S&P 500 rose 16 points to 1,669, registering a sixth straight day of gains and breaking its May 21st record. The Dow Jones added 137 points at 15,428, while the Nasdaq gained 36 points at 3,557.
With investor morale high, cyclical stocks all featured in the top gainers’ board with Caterpillar, JP Morgan Chase, Intel and Walt Disney among the top risers.
UK Market
In the UK, the FTSE 100 climbed higher still, with mining stocks, which fell heavily yesterday, doing well. The blue chip index was up 33 points at 6,538.
Matt Basi, head of UK sales trading at CMC Markets, said: “After June’s sell off in risk assets was attributed to seemingly hawkish comments from the Fed Chairman last month, the July rally has built further momentum this morning on the back of a much softer statement from the Fed Chairman after markets closed last night.
“This renewed dovishness has apparently been the result of concerns over the true state of the US labour market, though with half of the FOMC still arguing for tapering before the year end, the longevity of the asset purchase programme remains unclear.
“The general strength in equities has been aided by a string of strong earnings updates in the UK, with a number of firms publishing better than expected figures.”
Silver giant Fresnillo (LON:FRES) was flying high, up 12% thanks to a 4.5% rise in the silver price. Vedanta Resources (LON:VED) was up 5.6%, while Randgold Resources (LON:RRS) rose 5.4%.
One blue chip in a dark place today however was G4S (LON:GFS). The embattled security services firm was engulfed in a fresh scandal as the Serious Fraud Office is to launch a probe into claims the group overcharged the government for its electronic tags.
Justice Secretary Chris Grayling asked for an SFO investigation after a review found the government had been paying over the odds by tens of millions of pounds.
Serco (LON:SRP) has also been implicated and has pulled out of the retendering process. Its shares slumped 8.5%.
Elsewhere, junior markets carried on making gains.
One of the star performers was Kolar Gold (LON:KGLD), which shot up over 20% as it revealed the Indian Supreme Court has instructed the country’s government to proceed with the tender sale of the historic Bharat Gold Mines.
InternetQ (LON:INTQ) was up almost 7% after it saw record levels of new business in its MobiDialogue mobile marketing division in the first half.
In an upbeat trading statement, the company revealed that the breakneck pace it had set in 2012 continued into 2013, with organic revenues up more than 30% year-on-year, meaning the company will meet the market’s expectations for first half sales and underlying earnings (EBITDA).
Also up today was IPSA Group (LON:IPSA), which rose 8.7%, Churchill Mining (LON:CHL) up 5.5%. Medusa Mining (LON:MML) was also up over 17% to 101 pence a share, another beneficiary of the gold price rise.
Aureus Mining (LON:AUE) shares rose nearly 7% as it continues to find good grades from the satellite projects around its flagship New Liberty gold project in Liberia.
After encouraging results from Weaju last month, Aureus said an 18 hole programme at Ndablama, 40 kilometres (km) away from New Liberty, had recorded multiple gold intercepts at shallow levels.