By PAMELA SAMPSON, Associated Press
BANGKOK (AP) — The Dow's new all-time high and better economic data from the United States propelled Asian stock markets higher Wednesday.
Markets continued to shrug off a budget impasse among political leaders in Washington. Automatic government budget cuts took effect Friday after President Barack Obama and Congress failed to reach a budget deal. Economists expect the $85 billion in cuts to hurt U.S. economic growth.
Japan's Nikkei 225 index jumped 1.3 percent to 11,837.12. Hong Kong's Hang Seng added 0.7 percent to 22,721.18. South Korea's Kospi rose 0.3 percent to 2,021.82. Australia's S&P/ASX 200 advanced 1 percent to 5,127.20. Benchmarks in Singapore, Taiwan, Indonesia and mainland China rose.
Analysts said markets were taking their cues from Federal Reserve chairman Ben Bernanke, who has overseen a campaign of massive bond-buying to support the world's biggest economy after the 2008 financial crisis. The issuance of bonds has pushed their prices down, steering investors toward stocks. The program known as "quantitative easing" is in its third phase, which is dubbed QE3.
"The lesson is clear. Don't bet on Capitol Hill. Bet on Fed Chairman Ben Bernanke instead. To be sure, it was Bernanke's reassurance, as last week's congressional testimonies on monetary policy, to keep QE3 on its present course that turned a worried stock market into a record high," said analysts at DBS Bank Ltd. in Singapore.
The Dow Jones industrial average rose 125.95 points, or 0.9 percent, to close at 14,253.77 — more than double its low of 6,547 in March 2009. The Standard & Poor's 500 index rose 1 percent to 1,539.79. The Nasdaq composite rose 1.3 percent, to 3,224.13.
U.S. shares were also helped by service-sector data, as the Institute for Supply Management said Tuesday said its survey of purchasing managers — the executives who buy supplies for their companies — showed more optimism than analysts had expected in February.
Benchmark oil for April delivery rose 20 cents to close at $91.02 per barrel in electronic trading on the New York Mercantile Exchange. The contract rose 70 cents to close at $90.82 a barrel on the Nymex on Tuesday, hours after the death of Venezuelan President Hugo Chavez, whose country sits on the world's second-largest oil reserves, after Saudi Arabia.
In currencies, the euro rose to $1.3062 from $1.3040 late Tuesday in New York. The dollar fell to 93.12 yen from 93.29 yen.
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