Wall Street equity markets opened higher on Wednesday as the dollar sunk to a 15-month low and Asian countries reported robust signs of economic growth.
While many analysts are concerned the recent surge in the equity markets has been overdone given the economy’s weakness, a growing belief that wealthy nations like the United States will forge ahead with efforts to revive economic growth is luring risk-shy investors back into the stock markets. But the low interest rates have the dollar swooning.
Overnight, the dollar’s value fell against most other world currencies, trading at slightly over $1.50 against the euro early Wednesday. Persistently low interest rates in the United States have kept its pay-off meager, sending investors seeking high returns to the world’s stock markets.
“People want their money in anywhere but dollars right now, whether in commodities, foreign equities or equities themselves,” said Andrew J. Neale, portfolio manager for Fogel Neale Partners.
On Tuesday night, a Federal Reserve banker said the drop in the dollar’s value had not been “disorderly,” and he said interest rates would likely remain low for an extended period, Reuters reported.
As the dollar fell, gold continued its climb to record highs, trading at $1,116.82 an ounce early Wednesday.
The zeal from strong trading days in Europe and Asia seemed to perk up Wall Street. In afternoon trading, the major stock averages in Britain, Germany and France were up more than 1 percent. Overnight, the Hang Seng in Hong Kong rose by 1.6 percent, while the Nikkei in Japan stayed flat.
In early trading, the Dow Jones industrial average was up 46 points, or 0.4 percent. The broader Standard and Poor’s 500-stock index rose 0.59 percent, and the technology-heavy Nasdaq composite index fell 14.95 points, or 0.7 percent,.
As the market continue to rise, many investors ignored signs that consumer spending, which accounts for 70 percent of the U.S. economy, might not bounce as rapidly as some analysts might hope.
“The consumer is still not spending well,” Mr. Neale said. “Until there’s some sign of strength in the jobless market and housing market, then the consumer will remain on the sidelines.”
In a sign of retail spending, the department store Macy’s reported that its third-quarter losses were $9 million less than the year before. However, its projections for future profits did not meet Wall Street expectations.
The United States bond market was closed on Wednesday because of the Veteran’s Day holiday.
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