stock markets

Wall Street ends sharply higher; dollar dips on UK U-turn, strong earnings

Reuters
Wall Street ends sharply higher; dollar dips on UK U-turn, strong earnings

TRADING. A specialist trader works on the floor of the New York Stock Exchange in New York City, October 17, 2022.

Brendan McDermid/Reuters

All three major US stock indexes rally to end the session 1.9% to 3.4% higher while the dollar loses ground against a basket of world currencies on Monday, October 17

NEW YORK, USA – Wall Street jumped to robust gains on Monday, October 17, as solid earnings and a financial policy reversal in Britain fueled risk appetite and boosted the sterling and euro against the greenback.

All three major US stock indexes rallied to end the session 1.9% to 3.4% higher while the dollar lost ground against a basket of world currencies.

“The catalysts that have triggered in the markets year-to-date are well-known,” said Joseph Sroka, chief investment officer at NovaPoint in Atlanta. “Now, investors are looking for green shoots of catalysts that can start to provide some improvement.”

Stocks were primed for a strong open after Britain’s new finance minister Jeremy Hunt scrapped Prime Minister Liz Truss’ proposed tax cuts and reined in her energy subsidies, while Bank of America Corporation posted consensus-beating third quarter results, having benefited from a spate of interest rate hikes from the Federal Reserve.

The Dow Jones Industrial Average rose 550.99 points, or 1.86%, to 30,185.82, the S&P 500 gained 94.88 points, or 2.65%, to 3,677.95, and the Nasdaq Composite added 354.41 points, or 3.43%, to 10,675.80.

European stocks closed sharply higher on the UK’s financial policy reversal.

That reversal has “lifted some clouds, but it doesn’t lift the political risk,” said Peter Cardillo, chief market economist at Spartan Capital Securities in New York, who added that the new government formed by Truss “has caused a lot of uncertainties.”

Meanwhile, the easing yuan weighed on Asian markets.

The pan-European STOXX 600 index rose 1.83% and MSCI’s gauge of stocks across the globe gained 2.09%.

Emerging market stocks rose 0.32%. MSCI’s broadest index of Asia-Pacific shares outside Japan closed 0.19% lower, while Japan’s Nikkei lost 1.16%.

Long-dated Treasury yields turned higher late in a choppy session for the bond market, even as investor sentiment eased in the wake of the British policy about-face.

Benchmark 10-year notes last fell 3/32 in price to yield 4.0166%, from 4.006% late on Friday, October 14.

The 30-year bond last fell 23/32 in price to yield 4.0214%, from 3.975% late on Friday.

The euro and sterling gained strength following Hunt’s policy announcement, causing the greenback to lose ground against a basket of major world currencies.

The dollar index fell 1.02%, with the euro up 1.19% to $0.9835.

The Japanese yen weakened 0.19% versus the greenback at 149.06 per dollar, while sterling was last trading at $1.135, up 1.61% on the day.

Crude prices oscillated as markets juggled signs of looming recession and China’s continued loose monetary policy.

US crude settled down 0.18% to close at $85.46 per barrel, while Brent settled at $91.62 per barrel, essentially flat on the day.

Softness in the greenback gave a lift to gold prices.

Spot gold added 0.4% to $1,648.39 an ounce. – Rappler.com

Add a comment

Sort by

There are no comments yet. Add your comment to start the conversation.