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U.S. stocks rally ahead of ECB's decision

Xinhua, December 2, 2015 Adjust font size:

U.S. stocks traded higher in the morning session on Tuesday, the first trading day for December, as investors awaited major central banks' decisions later this month.

By noon, the Dow Jones Industrial Average gained 106.33 points, or 0.60 percent, to 17,826.25. The S&P 500 rose 12.49 points, or 0.60 percent, to 2,092.90. The Nasdaq Composite Index was up 25.75 points, or 0.50 percent, to 5,134.41.

The European Central Bank (ECB) is expected to expand its easing program and cut its negative deposit rate further on Thursday.

Meanwhile, investors were looking to Friday, which will see key November employment data, the last jobs report for the year, before the Federal Reserve decides on interest rates at its December meeting.

Wall Street expected an historic divergence in monetary policy by two central banks as the Fed was on track for an interest-rate hike this year while its European counterpart was expected to unleash further stimulus.

On the economic front, the U.S. November manufacturing purchasing managers' index (PMI) registered 48.6 percent, a decrease of 1.5 percentage points from the October reading of 50.1 percent, said the Institute Supply Management (ISM) Tuesday.

The print, well below market expectations, was the worst since June 2009 and the first time the index fell below 50 in three years.

On Monday, the International Monetary Fund (IMF) executive board decided to include the Chinese currency, the yuan, to its Special Drawing Rights (SDR) basket, marking a milestone in the renminbi (RMB)'s global march and a vote of confidence in China's ongoing financial reforms.

"The goal is to allow China to transact more business in yuan, allowing a further liberalization of Chinese markets," said Chris Low, chief economist at FTN Financial on Tuesday.

Analysts said such move would elevate the renminbi and China's influence in the global economy.

Chinese shares continued to rise on Tuesday as the benchmark Shanghai Composite Index went up 0.32 percent to close at 3,456.31 points. Endit