Good news from companies and investor hopes that the U.S. Federal Reserve will lower interest rates next week helped boost the value of the most important U.S. stock indices on Thursday.
The New York Dow Jones index rose by one percent, to 13,425 points. The S&P index gained 0.8 percent in value, closing trading at 1,484 points. The technology Nasdaq strengthened by 0.4 percent, to 2,601 points. The largest U.S. mortgage lender, Countrywide Financial Corp., saw a strong jump in its stock price, by as much as eight percent, to $17.95, following the announcement that it had arranged a $12 billion credit line to cover losses caused by tremors in the U.S. subprime mortgage market. Furthermore, McDonald’s delighted investors by announcing that it would increase its dividend payout by $0.50, to $1.50 per share.
This lifted its stock prices by 4.5 percent. Prices of energy stocks also rose significantly, due to a new spike in oil prices. Shares of oil giant Exxon Mobil strengthened by 0.8 percent. Investors are increasingly betting that the U.S. Federal Reserve will lower interest rates at its meeting on September 18 to prevent the U.S. economy from sliding into recession. Some believe that the key interest rate will be cut by half a percentage point. On European exchanges, stock prices continued to strengthen for the third consecutive day, driven by gains in the raw materials sector. The London FTSE index rose by 0.9 percent, to 6,364 points. The Frankfurt DAX gained 0.8 percent in value, closing trading at 7,536 points.
