Interest Rate Hike by China’s Central Bank

U.S. stocks ended flat in very thin trading on Monday as investors digested an earlier-than- expected interest rate hike by China’s central bank.

Since no economic report was scheduled to release and many investors were still in their vacations, the trading volumes were very thin in the market.

Major indexes opened lower, pressured by the news that the People’s Bank of China raised its benchmark interest rate by 25 basis points on Saturday, the latest efforts to rein in its high inflation. Although many investors agreed that such a move was necessary for a sustainable growth in the long run, it still spurred concerns for less demand and a relative economic slowdown.

Stocks later gradually pared losses as investors digested the China news. Financials were among the best performers after American International Group said it had obtained 4.3 billion dollars in bank credit lines.

Airline stocks were also under spotlight as thousands of flights were canceled and many airports were still closed after a severe blizzard raided the East Coast of the United States.

The Dow Jones industrial average dipped 18.46 points, or 0.16 percent, to 11555.03. The Standard & Poor’s 500 index added 0.77 points, or 0.06 percent, to 1,257.54 and the Nasdaq edged up 1.67 points, or 0.06 percent, to 2,667.27. (PNA/Xinhua)

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