While you were sleeping: Optimism lifts shares

While you were sleeping: Optimism lifts shares

(BusinessDesk) January 27 - Stocks on Wall Street gained, helped by U.S. President Barack Obama’s tax cut proposals.

In his State of the Union address to Congress on Tuesday night, Obama asked American politicians to back him on cutting corporate tax rates.

"Obama is trying to convey his hopes that the health of corporate America is important. He would like to simplify the tax system and keep corporate tax rates low. That has been taken well by investors," Keith Bowman, equity analyst at Hargreaves Lansdown, told Reuters.

Strong U.S. home sales data provided support, too.

Limiting gains was Boeing which dropped after posting a decline in quarterly profit and providing a disappointing forecast partly due to delays in its new 787 Dreamliner.

In early afternoon trading, the Dow Jones Industrial Average gained 0.13%, the S&P 500 Index rose 0.41% and the Nasdaq Composite Index climbed 0.68%.

The Dow briefly traded above 12,000 for the first time since June 2008.

Investors are eyeing comments from the U.S. Federal Reserve, which is expected to confirm the economic recovery is on track and affirm a plan to buy government debt. A Fed statement is expected at about 2.15pm EST.

The euro rose to US$1.3723 on trading platform EBS, its highest since November 22, before dipping back to US$1.3688, little changed from the prior close.

"The Fed is expected to keep policy on hold today, leaving the tone of the statement the major risk," Sacha Tihanyi, currency strategist at Scotia Capital in Toronto, told Reuters.

"Acknowledging an improved inflation situation may provide U.S. dollar support."

The U.S. Treasury Department’s US$35 billion sale of five-year notes may draw a yield of 2.061%, according to the average forecast of 6 of the Federal Reserve’s 18 primary dealers surveyed by Bloomberg News.

The securities, which mature in January 2016, yielded 2.055% in pre-auction trading. Bids are due by 1 p.m. New York time.

U.S. crude was up 3 cents at US$86.22 as of 1620 GMT, while Brent crude gained US$1.30 to US$96.55.

Spot gold was bid at US$1,325.55 an ounce at 1617 GMT, against US$1,332.75 late in New York on Tuesday.

Today, world top producer Chile said copper prices had peaked and would ease in 2012 as a supply deficit shrinks and demand growth slows slightly.

Even so, Chile forecast demand in top consumer China will grow by 6% this year.

(BusinessDesk)

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