Global Markets: Wall Street follows Europe higher, dollar rises

Updated: Thu, Oct 25, 2018
10:14 pm
Reuters
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U.S. stocks followed Europe higher on Thursday after investors ventured into risky bets again with encouragement from some strong earnings and the dollar rose against the euro after remarks from Europe`s Central Bank chief fueled fears about the monetary union.

Oil prices stabilized after an early sell-off as investors returned their focus to the fundamentals of supply and demand as equity markets regained some lost ground.

The greenback rose against the euro after the ECB`s Mario Draghi reaffirmed that its 2.6-trillion euro ($2.97 trillion) asset purchase program will end this year and interest rates could rise after next summer even though the economic outlook has darkened and political turmoil looms in Italy.

While equity investors sought bargains and some were reassured by positive earnings and stronger technology stocks, they also voiced caution.

"There`s a sense of nervousness and caution because a lot of people were caught off guard by the drop yesterday," Scott Brown, chief economist at Raymond James in St. Petersburg, Florida said.

"At this point it`s all about sentiment. People are looking for things to settle down and I think we need to see more concrete evidence of that."

Wall Street was helped by reassuring results from Microsoft Corp and strong advertising revenues from Twitter Inc. Google-parent Alphabet and Amazon.com were among the top boosters of the S&P ahead of their results later.

The Dow Jones Industrial Average rose 375.12 points, or 1.53 percent, to 24,958.54, the S&P 500 gained 47.06 points, or 1.77 percent, to 2,703.16 and the Nasdaq Composite added 196.21 points, or 2.76 percent, to 7,304.61.

The pan-European STOXX 600 was darting in and out of positive territory. It rose 0.51 percent and MSCI`s gauge of stocks across the globe gained 0.70 percent.

Draghi said he was confident the European Commission and Rome would come to a compromise over Rome`s budget plans, but the euro reversed earlier gains after he said the monetary union remained fragile.

The dollar index rose 0.18 percent, with the euro down 0.15 percent to $1.1374.

Currency dealers were also unwinding Swiss franc and Japanese yen safety trades and Italian and Spanish bonds held their ground as Draghi reiterated the European Central Bank`s plans to carefully remove its stimulus.

The Japanese yen weakened 0.28 percent versus the greenback at 112.61 per dollar, while Sterling was last trading at $1.2823, down 0.44 percent on the day.

MSCI`s broadest index of Asia-Pacific shares outside Japan closed 1.22 percent lower, while Japan`s Nikkei lost 3.72 percent.

But in China, the Shanghai SE Composite index managed to eke out a tiny gain after dropping as much as 2.8 percent at one point.

Investors were also eyeing mixed U.S. economic data.

New applications for U.S. unemployment aid rose last week, but the number of Americans receiving benefits fell to more than a 45-year low, pointing to tightening labor market conditions.

But new orders for key U.S.-made capital goods fell for a second straight month in September and the goods trade deficit increased further amid rising imports, suggesting economic growth moderated in the third quarter.

Benchmark 10-year Treasuries last fell 4/32 in price to yield 3.1375 percent, from 3.124 percent late on Wednesday.

U.S. crude rose 1.03 percent to $67.51 per barrel and Brent was last at $76.82, up 0.85 percent on the day.

(This article has not been edited by Zeebiz editorial team and is auto-generated from an agency feed.)

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