US stocks jump despite downbeat data

New York, Sep 16 (IANS) The US stocks posted solid gains on Tuesday, as some investors thought that a batch of soft economic reports could give the Federal Reserve an excuse to postpone rate rise on its two-day policy meeting beginning Wednesday.

The Dow Jones Industrial Average surged 228.89 points, or 1.40 percent, to 16,599.85. The S&P 500 added 25.06 points, or 1.28 percent, to 1,978.09. The Nasdaq Composite Index advanced 54.76 points, or 1.14 percent, to 4,860.52, Xinhua news agency reported.

Traders keep a close eye on the Fed’s highly-watched key policy meeting on September 16-17, when the US central bank could raise interest rates for the first time in more than nine years.

Some analysts, however, believed that the Fed will not decide to hike rates on the meeting as a string of economic data came out weaker than expected.

The advance estimates of U.S. retail and food services sales for August increased 0.2 percent from the previous month to $447.7 bn, slightly below market consensus of a 0. 3-percent gain, the Commerce Department announced Tuesday.

The US industrial production decreased 0.4 percent in August, exceeding market expectations of a 0.2-percent decline, according to the Federal Reserve on Tuesday.

Meanwhile, the September 2015 Empire State Manufacturing Survey indicates that business activity declined for a second consecutive month for New York manufacturers.

The headline general business conditions index came out at minus 14.7, up slightly from minus 14.92 in August and well below market estimates of minus 0.5.

“Orders and employment weighed on the index. It is the worst back-to-back reading since the beginning of 2009,” said Jay Morelock, an economist at FTN Financial, in a note.

The CBOE Volatility Index, often referred to as Wall Street’s fear gauge, fell 7.05 percent to end at 22.54 Tuesday.

In other markets, oil prices bounced Tuesday as traders bought the dip after a sharp decline.

The West Texas Intermediate for October delivery moved up 59 cents to settle at 44.59 dollars a barrel on the New York Mercantile Exchange, while Brent crude for October delivery increased 26 cents to close at 46.63 dollars a barrel on the London ICE Future Exchange.

The US dollar climbed against most major currencies on Tuesday as investors were awaiting the closely-watched Federal Reserve policy meeting which starts Wednesday.

In late New York trading, the euro fell to $1.1278 from $1.1315 in the previous session, while the dollar bought 120.46 Japanese yen, higher than 120.07 yen of the previous session.

Gold futures on the COMEX division of the New York Mercantile Exchange closed lower on Tuesday as the US dollar modestly rallied for a second straight session, and European and U.S. stocks regained their footing.

The most active gold contract for December delivery lost $5.1, or 0.46 percent, to settle at $1,102.60 per ounce.

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