Poor US data eases stock market’s concerns

The benchmark S&P/ASX 200 (Index: ^AXJO) (ASX: XJO) index is up 10 points at 5,131, after having hit a high of 5,157 points in early trading, with high-yielding dividend stocks largely leading the way. Westpac (ASX: WBC), ANZ (ASX: ANZ), NAB (ASX: NAB) and Commonwealth Bank (ASX: CBA) are all up between 0.4% and 0.7% due to lower bond yields and poor new home sales data in the US.

Although poor home sales data is not a good sign for the economy and its continued recovery, the stock market has reacted well as the figures act as a dampener on expectations that the US Federal Reserve will begin reducing its stimulus program as early as next month.

The big winner for the day, however, is Newcrest Mining (ASX: NCM), which is up 6.9% following the 1.6% rise in spot gold overnight. After being largely sold off by investors earlier in the year, the stock has now recovered 54% of its value since late June.

After the market’s “strong bounce” over the last few days however, RBS Morgans investment advisor Christopher Macdonald believes that “the market may soon need to cool its jets” – particularly with the level of instability and uncertainty currently in the Middle East.

Are you interested in our #1 dividend-paying stock? Discover The Motley Fool’s favourite income idea for 2013-2014 in our brand-new, FREE research report, including a full investment analysis! Simply click here for your FREE copy of “The Motley Fool’s Top Dividend Stock for 2013-2014.”

More reading

Motley Fool contributor Ryan Newman does not own shares in any of the companies mentioned in this article.

Two New Stock Picks Every Month!

Not to alarm you, but you’re about to miss a very important event! Chief Investment Advisor Scott Phillips and his team at Motley Fool Share Advisor are about to reveal their latest official stock recommendation. The premium “buy alert” will be unveiled to members and you can be among the first to act on the tip.

Don’t let this opportunity pass you by – this is your chance to get in early!

Simply enter your email now to find out how you can get instant access.

By clicking this button, you agree to our Terms of Service and Privacy Policy. We will use your email address only to keep you informed about updates to our website and about other products and services we think might interest you. You can unsubscribe from Take Stock at anytime. Please refer to our Financial Services Guide (FSG) for more information.