Global stocks, dollar gain as Fed sees improving economy

Wed Jul 29, 2015 4:40pm EDT
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By Herbert Lash

NEW YORK (Reuters) - Global equity markets rose on Wednesday, lifted by strong U.S. and European corporate earnings and a Federal Reserve statement that said the U.S. economy continues to strengthen, adding to expectations an interest rate hike is getting closer.

Fed officials said they felt the U.S. economy had overcome a first-quarter slowdown and was "expanding moderately" despite a downturn in the energy sector and headwinds from overseas.

The Fed left its key interest rate, which has remained near zero for almost a decade, unchanged as expected. The Fed has said it will raise rates once it sees a sustained recovery.

"The Fed is taking baby steps towards a rate hike," said Brian Jacobsen, chief portfolio strategist at Wells Fargo Funds Management in Menomonee Falls, Wisconsin.

"The Fed is doing a good job getting people ready for a rate hike before year's end, making it likely to be a low-impact event," he said.

Advancing issues listed on the New York Stock Exchange outnumbered declining ones by almost 3 to 1, while Nasdaq-listed advancing issues slightly outnumbered declining issues.

With more than half of second-quarter results now reported, analysts expect overall earnings of S&P 500 companies to edge up 0.8 percent and revenue to decline 3.9 percent, according to Thomson Reuters data.

Shares of General Dynamics (GD.N: Quote) hit a record high, gaining 3.9 percent after the company said it saw a rebound in demand for its Gulfstream business jets. The shares led a sector-wide rally for major aerospace stocks.   Continued...

Traders work on the floor of the New York Stock Exchange July 28, 2015. REUTERS/Brendan McDermid  - RTX1M5BE