Wall Street holds strong gains

It’s been a buoyant trading session in the US today, with momentum from yesterday’s rally picking up pace and pushing the Dow into triple-digit gains.

There has been an air of optimism on Wall Street the last couple of days, ushered in by upbeat earnings from the big US banks, and a succession of economic reports that seem to rebut the weakness indicated by last Friday’s employment data.

The Fed’s Beige Book today became the latest survey to offer up conflicting testimony, with anecdotal evidence suggesting increases in hiring in two-thirds of the Federal Districts. This gives credence to the theory that the December payrolls number may have been skewed lower by cold weather affecting parts of the US last month.

Nine of the 12 districts describe the economy as growing at a ‘moderate pace’, with the same proportion noticing an increase in retail activity since the last report. The inflation situation seems unchanged, with a majority of districts reporting that wage and price pressures were ‘contained’, remaining stable or increasing only slightly.

With under half an hour to the close in New York, the Dow was up 0.67% or 109 points at 16,483, while the S&P 500 had gained 0.52% at 1848.4.

Tomorrow we have initial jobless claims, more information about US inflation with December’s CPI, and a rash of earnings, including Goldman Sachs, American Express and Intel, all of which are components of the Dow Jones Industrial Average.

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