U.S. Stocks Edge Higher
16 Gennaio 2019 - 04:05PM
Dow Jones News
By David Hodari
U.S. stocks echoed mild gains elsewhere on Wednesday, as markets
absorbed a slew of financial sector corporate earnings.
The Dow Jones Industrial Average climbed 80.45 points, or 0.3%,
to 24146.04 shortly after U.S. markets opened. The S&P 500 and
the Nasdaq both rose 0.2%. Investors were closely focused on
financial-sector earnings, with Bank of America and Goldman Sachs
rising 4.4% and 3.1% respectively in premarket trade after both
posted profit increases.
The Stoxx Europe 600 was up 0.4% with mild, broad-based gains in
early afternoon trading. The index's banking sector climbed 1.3%
following upbeat U.S. earnings and after its Italian constituents
came under pressure Tuesday, following reports that the European
Central Bank wants them to clean up their bad loans more
effectively.
British assets gave a tepid reaction to the U.K. parliament's
overwhelming rejection of Prime Minister Theresa May's proposed
Brexit deal late Tuesday. The defeat was the largest suffered by a
sitting British government in modern times.
The FTSE 100 fell 0.4%, underperforming other European
benchmarks, as the British pound gave up its initial gains to move
up 0.1% against the U.S. dollar and down 0.2% against the euro.
Still, market participants saw a lower likelihood of the country
leaving the European Union without a deal.
"The probability of a softer Brexit or remaining in the EU has
gone up more than anything else as a result of the vote in
parliament last night, and that offsets persistent uncertainty,"
said John Wraith, head of U.K. rates strategy and economics at
UBS.
The yield on 10-year U.K. government debt rose to 1.318% from
1.259% late Tuesday. Yields rise as prices fall.
Gentle gains in Europe followed mixed trading in Asia. Japan's
Nikkei benchmark ticked 0.6% lower after hitting a four-week high
Tuesday, while the Shanghai Composite Index was flat and the
Shenzhen A-Share fell 0.1%. Hong Kong's Hang Seng gained 0.3%.
A string of gloomy economic figures out of China in recent weeks
has concerned investors about the state of broader global growth,
although reports that the Chinese central bank had injected
liquidity into the country's banking system helped soothe those
jitters Wednesday.
Markets have recently focused on those growth concerns, as well
as precarious trade negotiations, but a positive start to
fourth-quarter corporate earnings season has also provided a balm
to markets.
In the current earnings season, "we expect some growth, and if
the current geopolitical issues abate, we'll see the move back to
fundamentals that investors want," said Christian Nolting, chief
investment officer at Deutsche Bank Wealth Management.
Elsewhere, the U.S. partial government shutdown -- the longest
in history -- continued with no end in sight. President Trump has
no meetings scheduled with House Speaker Nancy Pelosi and Senate
Democratic leader Chuck Schumer for this week, and the White House
has struggled to convince individual Democrats to back the
president's $5.7 billion request for wall construction and security
funds on the U.S.-Mexico border.
Market participants will also continue to watch British
politics, with a no-confidence vote against Prime Minister Theresa
May planned. Mrs. May is widely expected to survive the vote, which
is due to take place later Wednesday.
That growing consensus was a factor behind the uptick in the
pound, according to Stephen Gallo, European head of FX strategy at
BMO Financial Group.
"People could see the situation moving to a confidence motion
that they think the prime minister will win," Mr. Gallo said.
In commodities, Brent crude oil was down 0.4% at $60.38 a
barrel, while gold fell 0.1% to $1,288.20 a troy ounce.
Write to David Hodari at David.Hodari@dowjones.com
(END) Dow Jones Newswires
January 16, 2019 09:50 ET (14:50 GMT)
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