US stock market hits record highs

The three major indices closed big due to Japan's economic struggles...

US stock market hits record highs

Chinese investors monitor stock prices at a brokerage house in Beijing | Image: Mark Schiefelbein / AP/Press Association Images

The three principal US stock market indices hit record levels once again yesterday as poorer-than-expected Japanese economic growth figures convinced the market that the Bank of Japan and other central banks will soon start pumping money into their economies.

Japan's economy has essentially stalled, increasing at an annualised rate of 0.2% in the three months to June. This was below market forecasts of 0.7% and a significant slowdown from the 2% growth in the first quarter.

The Dow Jones, the S&P 500 and the Nasdaq all closed between 0.3% and 0.6% higher on Monday night in anticipation of so-called quantitative easing programmes that will also keep interest rates low.

The FT100 share index closed at a 14-month high at just under the 7,000 level.

Markets were also buoyed by recovering oil prices, which have gained about 14% since the beginning of August on hopes that a meeting of OPEC in Algiers next month might impose agreed curbs on oil supply.

Mining companies and chemical manufacturers made the biggest gains, with machinery companies and banks following.