NEW YORK — Global equity markets and the dollar rose on Friday, ending a rocky week on an upbeat note after Federal Reserve chairwoman Janet Yellen said the US central bank was on track to raise interest rates this year and US economic growth was revised upward again.
Stocks on Wall Street jumped following an almost 3% surge in Europe after the US economy grew more than previously estimated in the second quarter on stronger consumer spending and construction, the second upward revision in a row.
Gross domestic product rose at a 3.9% annual clip, up from the 3.7% pace reported in August, the Commerce Department said.
Ms Yellen said on Thursday that she and other Fed policy makers did not expect recent economic and financial market turmoil to significantly alter the central bank’s policy, easing concern about the world’s economic health.
There was much to like about the US economy in the second half of the year despite “all the global malaise”, said Jacob Oubina, senior economist at RBC Capital Markets in New York.
“What the market latched on to with Ms Yellen’s speech on Thursday is that she’s in the 2015 camp for a rate hike. If the domestic economy holds in there, they are going to hike in December,” Mr Oubina said.
The dollar rose 0.32% to $1.1192 against the euro and 0.44% to ¥120.59 against the yen. The dollar index rose 0.25%.
MSCI’s all-country world index rose 0.89% from a tepid performance in Asia, where stocks were in the red after data showed Japan slipping back into deflation.
The Dow Jones industrial average rose 150.56 points, or 0.93%, to 16,351.88, the S&P 500 added 10.07 points, or 0.52%, to 1,942.31 and the Nasdaq composite gained 11.92 points, or 0.25%, to 4,746.4.
The biggest one-day rise in a month and the third-biggest this year in Europe was not enough to prevent a decline on the week, however.
The pan-European FTSEurofirst 300 index rose 2.86%, while the eurozone’s blue-chip Euro STOXX 50 index climbed 3.12%.
The yield on the US 10-year Treasury note rose 14/32 in price to yield 2.1694%, while gold fell from one-month highs after Ms Yellen’s speech and on the strong dollar.
Gold futures for December delivery were down 0.82 percent to $1,144.3 an ounce.
Oil prices edged up, boosted by the stronger than expected US economic data, though the longer-term outlook for energy markets remains weak due to a global oil supply glut and uncertainty over economic growth prospects in Asia.
Brent crude oil futures, the global benchmark, were up 1.02% at $48.66 a barrel, while US West Texas Intermediate futures were up 1.98% at $45.80 a barrel.
