The Business Times

Stocks' continued rise contingent on Ukraine conflict not worsening

Traders focused on US economy, timing of Fed's rate hike

Published Sun, Aug 24, 2014 · 10:00 PM
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LAST week, the broad Standard & Poor's 500 closed near a new record high even as Russia and Ukraine moved to the brink of war and stocks will likely continue to rise as long as those nations don't go over the brink.

Inured to tragedies in Iraq and Gaza, and the possibility of a regional war in Ukraine, stock bulls have shifted focus to two narrower issues: the apparent acceleration of US economic growth and the timing of the Federal Reserve's first interest rate hike since 2006.

Last week, there was more evidence that the 4 per cent rate of growth reported for the second quarter might be sustainable. Used home sales for July rose more than anticipated and weekly jobless claims declined. Most impressively, the initial readings from the Institute for Supply Management's survey of manufacturers hinted at the strongest expansion of activity since 2010.

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