US stocks edged down slightly today (October 9th), a day after a rally that saw Wall Street's biggest gain of the year.
The Dow Jones industrial average lost 0.2 per cent to 16,961 at 09:35 ET in New York, while the Standard and Poor's 500 edge down 0.1 per cent to 1,966. The Nasdaq composite slipped 0.1 per cent to 4,464.
Wall Street hit a record high yesterday after the Federal Reserve released minutes from its policy meeting, which eased investors' fears of an interest rates rise. It said it does not plan to hike interest rates before a "considerable" amount of time.
The Dow Jones jumped 1.6 per cent to 16,994.22, while the Standard & Poor’s 500 index added 1.8 per cent to 1,968.89 and the Nasdaq composite rose 1.9 per cent to 4,468.59. All three indexes had their biggest point and percentage gains of 2014.
US policymakers showed concerns about the risks to the US dollar's strength, a stumbling eurozone economy, slowing growth in China and Japan and geopolitical risks.
"Some participants expressed concern that the persistent shortfall of economic growth and inflation in the euro area could lead to a further appreciation of the dollar and have adverse effects on the US external sector," the minutes said.
The dollar fell to a two-week low against the euro and declined against the yen following the release of the Fed minutes.
However, with further signs that the world economy is continuing to struggle, some investors were doubtful the gains can continue on support from aggressive global central bank policy.
"If at the end of the day what we are left with is slowing global growth and ongoing expansive monetary policies, it is doubtful that today's equity bounce can be sustained," David Joy, chief market strategist at Ameriprise Financial in Boston, told Reuters.
Investors have been worried about a rate rise, so any indication that it is still some time away is viewed as welcome news.
Economists at investment banking firm Jefferies wrote in a note to clients that the minutes were even more dovish – that is, leaning towards keeping rates low – than even the Fed's statement at the end of its September meeting, the BBC reports.
The Fed had already said in September that there was no "calendar date" for an interest rate rise.
"The Committee continues to anticipate, based on its assessment of these factors, that it likely will be appropriate to maintain the current target range for the federal funds rate for a considerable time after the asset purchase program ends, especially if projected inflation continues to run below the Committee's two per cent longer-run goal, and provided that longer-term inflation expectations remain well anchored," it stated.
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