FILE- This April 5, 2018, file photo shows the facade of the New York Stock Exchange. The U.S. stock market opens at 9:30 a.m. EDT on Thursday, June 14. (AP Photo/Richard Drew, File)

Stocks rise following ECB rate decision, strong US data

June 14, 2018 - 10:46 am

NEW YORK (AP) — U.S. stocks rose Thursday after Europe's central bank became the latest to spell out how it will close the spigot on the emergency stimulus it's flooded the market with in recent years.

More evidence also arrived to show that the U.S. economy is improving, including a better-than-expected report on retail sales, and the S&P 500 was on pace for its fourth gain in the last five days.

KEEPING SCORE: The S&P 500 was up 12 points, or 0.5 percent, at 2,788, as of 10:30 a.m. Eastern time. The Dow Jones industrial average gained 95, or 0.4 percent, to 25,296, and the Nasdaq composite rose 65, or 0.8 percent, to 7,760.

STIMULUS WATCH: The European Central Bank said it will begin phasing out its bond-buying program in the autumn before ending it after December. That could have worried investors, who have grown accustomed to big stimulus programs from central banks in support of markets. But the ECB also said that it will hold off on raising interest rates until at least the summer of 2019, which was more accommodative than some investors had been expecting.

Europe's central bank is following the lead of its U.S. counterpart, the Federal Reserve, which has already halted its bond purchases and has raised interest rates seven times since late 2015. Its latest move was on Wednesday, when it raised its benchmark rate by another quarter of a percentage point and indicated two more increases may come this year. Higher rates can help stave off inflation, but they can also hinder economic growth.

Next up on the global calendar is the Bank of Japan, which meets Friday on interest-rate policy. Many economists expect it to announce no changes to its stimulus program.

WORLD MARKETS: European stocks were up more than U.S. indexes, with France's CAC 40 rising 1.5 percent and Germany's DAX up 1.7 percent. The FTSE 100 in London gained 0.9 percent. In Asia, Japan's Nikkei 225 index dropped 1 percent, South Korea's Kospi sank 1.8 percent and the Hang Seng in Hong Kong lost 0.9 percent.

Stocks from developing economies continued their struggles, which have been compiling since the spring. Investors worry that higher U.S. interest rates will hurt emerging-market economies, and the MSCI Emerging Markets index fell 0.8 percent

STRONG US ECONOMY: U.S. retail sales jumped in May after shoppers spent more at home and garden stores, gas stations and restaurants. They likely felt emboldened by a strong job market, which has helped to lift consumer confidence.

The retail-sales numbers are closely followed because they're an indicator of overall consumer spending, which accounts for the bulk of the U.S. economy. Economists say economic activity is likely picking up following a slowdown in growth during the first quarter of the year.

A separate report showed that fewer workers filed for unemployment claims last week than economists expected, an encouraging indicator for the labor market.

CRUISING: Royal Caribbean Cruises jumped to the biggest gain in the S&P 500 after it agreed to buy a two-third stake in Silversea Cruises for about $1 billion. The acquisition will give Royal Caribbean more access to the luxury cruising market.

Royal Caribbean rose 4.4 percent to $112.73.

YIELDS: The yield on the 10-year Treasury fell to 2.94 percent from 2.98 percent late Wednesday. It gave up all its gains from the prior day, when the Federal Reserve surprised some investors by speeding up its timetable for rate increases.

CURRENCIES: The dollar fell to 110.42 Japanese yen from 110.55 yen late Wednesday. The euro fell to $1.1634 from $1.1773, and the British pound fell to $1.318 from $1.3358.

COMMODITIES: Benchmark U.S. crude rose 27 cents to $66.91 per barrel. Brent crude, the international standard, fell 27 cents to $76.47.

Gold rose $5.30 to $1,306.60 per ounce.


AP Business Writer Youkyung Lee contributed from Seoul, South Korea.

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