European stocks swung higher Friday, with investors taking remarks from Federal Reserve Chairwoman Janet Yellen as a sign of confidence in economic growth world-wide.
The Stoxx Europe 600 SXXP, +0.50% closed up 0.5% at 343.72, but it had been creeping up shortly before the text of Yellen’s speech in Jackson Hole, Wyo., was released. All but the consumer-services sector Q0E, -0.09% ended higher.
The FTSE 100 UKX, +0.31% rose 0.3% to 6,838.05, but the health care, consumer-goods and consumer-services sectors lost ground. Miners popped up after being under pressure this week.
Yellen, at the Fed’s summer summit, signaled that the U.S. central bank is preparing to increase interest rates as soon as next month.
“In light of the continued solid performance of the labor market and our outlook for economic activity and inflation, I believe the case for an increase in the federal-funds rate has strengthened in recent months,” she said.
The blue-chips index started to pick up a bit of steam before the text of Yellen’s speech in Jackson Hole, Wyo., was released.
The Dow Jones Industrial Average and the S&P 500 index finished lower Friday after comments from Fed Vice Chairman Stanley Fischer doubled down on a speech by Federal Reserve Chairwoman Janet Yellen that asserted the case for a rate increase is gathering steam.
The Dow Jones Industrial Average DJIA, -0.29% fell 53.01 points, or 0.3%, to finish at 18,395.40, backing off an earlier 124-point gain, but paring a 113-point loss.
The S&P 500 index SPX, -0.16% fell 3.43 points, or 0.2%, to close at 2,169.04, after trading up as many as 16 points earlier and bouncing back from a 12-point deficit.
The Nasdaq Composite Index COMP, +0.13% rose 6.71 points, or 0.1%, to finish at 5,218.92, after being up about 41 points earlier and down as low as 20 points during the session.
Japanese stocks surged to 1-1/2-week highs on Monday morning as the yen weakened after U.S. Federal Reserve Chair Janet Yellen signalled an interest rate hike remains on the cards this year, lifting insurers and exporters.
Speaking at the annual gathering of central bankers in Jackson Hole, Wyoming, Yellen said the case for raising U.S. interest rates had strengthened thanks to improvements in the labour market and expectations for moderate economic growth.
The Nikkei share average soared 2.2 percent to 16,721.23 in midmorning trade, after rising as high as 16,737.95, the highest since August 17.
Insurers staged a rally as higher U.S. rates would allow them to reap yield gains from their investments in U.S. bonds, while their domestic stock portfolio would also benefit from Nikkei’s uptick.