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Wall Street ends banner January as growth worries dog European stocks
NEW YORK, Feb 1, 2019 (BSS/AFP) – Wall Street stocks finished a banner
month on a mostly positive note Thursday on optimism over US-China trade
relations, while European bourses were pressured following tepid economic
data.
The Dow finished the session a hair lower, but up 7.2 percent for all of
January, in its best start to the year in 30 years.
The S&P 500 and Nasdaq finished solidly higher as Wall Street continued to
cheer the Federal Reserve’s dovish stance on monetary policy outlined on
Wednesday.
US stocks also picked up momentum late in the session when President
Donald Trump hailed “tremendous” progress in US-China trade negotiations held
over the last two days in Washington.
In a letter to Trump from Chinese leader Xi Jinping, that was read out by
a Chinese official, Xi said relations were at a “critical” stage and that he
hoped “our two sides will continue to work with mutual respect.”
But Trump said they still face a “hard deadline” of March 1, which the US
is set to more than double tariffs on $200 billion in Chinese imports.
Stocks were mixed in Europe, with London and Paris rising modestly and
Frankfurt and Milan retreating after European data showed the impact of a
lackluster finale to 2018, including in Italy, which officially entered a
recession.
The Eurostat agency estimated 2018 growth at 1.8 percent after expanding
by a comparatively booming 2.4 percent in 2017.
“The big picture remains that this was a disappointing end to the year…
(and) the prospects for the first quarter of this year currently look no
better,” said Andrew Kenningham, an economist at Capital Economics.
– Italian recession –
Data also showed that Italy’s economy shrank 0.2 percent in the final
quarter of last year after a 0.1 percent drop in the third quarter.
The technical definition of a recession is economic contraction for two
quarters in a row. Italy is the eurozone’s third largest economy after
Germany and France.
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“The risk of recession in the eurozone is something that has been widely
discussed for weeks now but the news that Italy has fallen into technical
recession still comes as a blow to the region,” Oanda analyst Craig Erlam
told AFP.
“Others could also follow with Germany having posted negative growth in
the third quarter. This is naturally weighing on sentiment,” Erlam warned.
Italy’s recession places intense pressure on the nation’s populist
government headed by Prime Minister Giuseppe Conte, who took power in June on
the back of big-spending electoral promises.
“This (recession) should not really be a surprise given the direction of
travel of recent data,” CMC Markets analyst Michael Hewson told AFP. “The
problem EU policymakers have is that it looks as if it could well be much
more serious than originally thought.”
– Key figures around 2200 GMT –
New York – Dow: DOWN 0.1 percent at 24,999.67 (close)
New York – S&P 500: UP 0.9 percent at 2,704.10 (close)
New York – Nasdaq: UP 1.4 percent at 7,281.74 (close)
London – FTSE 100: UP 0.4 percent at 6,968.85 (close)
Frankfurt – DAX 30: DOWN 0.1 percent at 11,173.10 (close)
Paris – CAC 40: UP 0.4 percent at 4,992.72 (close)
Milan – FTSE MIB: DOWN 0.2 percent at 19,730.78
EURO STOXX 50: DOWN 0.1 percent at 3,159.43 (close)
Tokyo – Nikkei 225: UP 1.1 percent at 20,773.49 (close)
Hong Kong – Hang Seng: UP 1.1 percent at 27,942.47 (close)
Shanghai – Composite: UP 0.4 percent at 2,584.57 (close)
Pound/dollar: DOWN at $1.3108 from $1.3116 at 2200 GMT
Euro/pound: DOWN at 87.31 pence from 87.53 pence
Euro/dollar: DOWN at $1.1447 from $1.1480
Dollar/yen: DOWN at 108.82 yen from 109.04
Oil – Brent Crude: UP 24 cents at $61.89 per barrel
Oil – West Texas Intermediate: DOWN 44 cents at $53.79 per barrel
BSS/AFP/HR/0950