While you were sleeping: Buffett, Dudley lift stocks

While you were sleeping: Buffett, Dudley lift stocks

(BusinessDesk) March 1 - Stocks on Wall Street advanced after comments by Federal Reserve officials suggested they were ready to bolster the economy if needed.

Warren Buffett also helped underpin optimism by saying he was looking to make acquisitions.

New York Fed Bank President William Dudley said the “considerably brighter” economic outlook wasn’t yet reason for the central bank to withdraw its record monetary stimulus.

“We provided additional monetary policy stimulus via the asset purchase program in order to help ensure the recovery did regain momentum,” Dudley said today in a speech in New York.

“A stronger recovery with more rapid progress toward our dual mandate objectives is what we have been seeking. This is welcome and not a reason to reverse course.”

In early afternoon trading, the Dow Jones Industrial Average rose 0.63% and the Standard & Poor's 500 Index gained 0.41%. The Nasdaq Composite Index edged 0.08% lower.

“It’s a constructive environment,” Mike Ryan, the New York-based head of wealth management research for the Americas at UBS Financial Services Inc., told Bloomberg News.

“Whenever Warren Buffett’s talking about putting money to work, that’s going to have a positive impact on people’s views and on the market.”

Others have found value as well. Ventas Inc plans to buy Nationwide Health Properties Inc for US$5.7 billion.

Blackstone Group LP agreed to buy Centro Properties Group’s U.S. shopping centers for US$9.4 billion, reports said.

For some the outlook is not so rosy. A decline in Amazon.com Inc after UBS downgraded the stock, citing increased costs, weighed on the Nasdaq.

Investors will now closely eye Fed Chairman Ben Bernanke’s testimony to Congress on Tuesday and Wednesday. Analysts expect him to confirm expectations that U.S. interest rates won’t rise any time soon.

Today, the U.S. dollar fell against a basket of major currencies, sliding to its lowest level since November 9.

"The dollar is remaining on its back foot because other central banks are turning more hawkish but the Fed is not," Amelia Bourdeau, senior currency strategist at UBS in Stamford, Connecticut, told Reuters.

"We don't think [Bernanke] will change his outlook for the economy. He will emphasize that the Fed has the tool to exit quantitative easing but is not going to do so yet," she said

Meanwhile, the euro strengthened to its highest level in almost a month before an interest-rate meeting by the European Central Bank on Thursday.

Oil rose, with Brent crude futures for April up 40 cents to US$112.54 a barrel at 11.09am EST.

Brent's premium to its U.S. counterpart was near US$15 a barrel.

Crude oil shipments from Libya were at a virtual standstill because of reduced output and bad weather, shipping sources told Reuters.

Gold rose, bringing its gains for the month to 6% as turmoil in the Middle East and North Africa bolstered the appeal of the safe-haven investment.

Spot gold was bid at US$1,410.50 an ounce at 1502 GMT, against US$1,409.15 late in New York on Friday.

With the precious metal near record highs, analysts told Reuters that further gains might be limited.

"It requires some spreading of the political turmoil and an intensification in those other countries to see gold make much bigger gains," said Mitsubishi analyst Matthew Turner.

"From a market viewpoint, gold is near its highs again. It was probably quite easy to get up to US$1,400, but it will be more difficult to rise from here."

(BusinessDesk)

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