Market update: US equities higher as Summers withdraws from race to head the US Fed – 17.09.2013

Source: Henderson Global Investors

US stocks jumped on news that former US treasury secretary Larry Summers had withdrawn from the race to be the new head of the Federal Reserve. At the end of trading the Dow Jones was up 0.8% and the S&P 500 was 0.6% higher. Summers is thought to be an advocate of winding down of the bond-buying process faster than others. This comes just days before the next policy meeting where it is expected that the central bank will cut $10bn of its $85bn a month quantitative easing programme. Noticeable climbers in the US markets were Boeing and General Electric, while shares in Boise jumped as the company announced that it was being bought by Packagin Corp. of America for $1.27bn.

London opened to the news that the government had successfully sold a 6% stake in Lloyds Banking Group, leading to a 2% fall in the group’s shares. The FTSE 100 Index fell 0.4% and the FTSE Eurofirst 300 lost 0.5%. Mining shares weighed on the index with Vedanta Resources down 2.7% and Glencore Xstrata 2.2% lower. Debenhams has predicted that it will meet profit forecasts after the high temperatures boosted summer sales, resulting in its shares rising 2.5%. Generally, the mood of the market is one of caution leading up to the next meeting of the US Federal Reserve on Wednesday.