Wall Street climbed, greenback rally

The Dow rose 0.1 pc, while the Nasdaq Index gained 0.4 pc. Photo / AP

Wall Street climbed, as did the US dollar, a day after the Federal Reserve signalled a steeper path for interest rate increases, offering further optimism about the outlook for the US economy and corporate profits.

Fed policy makers on Wednesday indicated they now see three quarter-point rate hikes next year, up from the two expected in their previous forecasts.

"Investors are buying Yellen's story that the rate hike is a vote of confidence in the economy," Dave Donabedian, chief investment officer of Atlantic Trust in Boston, told Reuters.

"The economy is growing, the job market is strong and ... monetary normalisation can proceed."

In 1.20pm trading in New York, the Dow Jones Industrial Average added 0.6 per cent, while the Nasdaq Composite Index gained 0.8 per cent. In 1.05pm trading, the Standard & Poor's 500 Index climbed 0.6 per cent.

The Dow rose, led by gains in shares of JPMorgan Chase and those of Goldman Sachs, recently trading 2 per cent and 1.9 per cent higher respectively.

The US dollar also strengthened, and some see further gains ahead.

"At the moment it feels like going long dollar is free money, no one loses," Stuart Bennett, head of Group-of-10 currency strategy at Banco Santander in London, told Bloomberg.

"The market believes it can push for another two to three percent relatively risk-free, a nice Christmas bonus. The market never appears to need a reason to be negative about the euro."

Rupert Murdoch's Twenty-First Century Fox agreed to buy the 61 percent Sky it doesn't already own in a US$14.6 billion deal.

"Sky is much more than a satellite distribution company, it's a creative, commercial and consumer powerhouse," James Murdoch, the chief executive of Fox and chairman of Sky, told analysts on a call, according to Reuters.

Meanwhile, shares of Yahoo slumped, down 4.4 per cent to US$39.10 as of 1.16pm in New York after earlier falling as low as US$38.25, amid concern that its latest disclosure of a massive hacking of its users' data might jeopardise Verizon's deal to buy it.

The economy is growing, the job market is strong and ... monetary normalisation can proceed.

"Yahoo has fallen down on security in so many ways I have to recommend that if you have an active Yahoo email account, either direct with Yahoo of via a partner like AT&T, get rid of it," Stu Sjouwerman, chief executive of cyber security firm KnowBe4, said in a broadly distributed email, Reuters reported.

In Europe, the Stoxx 600 Index finished the session with a 0.9 per cent gain from the previous close, bolstered by financial stocks. The index closed at its highest level since January, according to Bloomberg.

The UK's FTSE 100 Index increased 0.7 per cent, while Germany's DAX Index and France's CAC 40 Index each rallied 1.1 per cent.

"Market participants are re-playing the theme that a US hike means a stronger dollar and a weaker euro, which is good for European stocks overall," Stephane Ekolo, chief European strategist at Market Securities, told Bloomberg.

"If you add expectation for a rise in economic growth and inflation in Europe and a recovery in earnings, all that bodes well for European stocks at the moment."