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Global stocks mostly rise; dollar gains on upbeat Fed
NEW YORK, July 19, 2018 (BSS/AFP) – Global stocks mostly rose Wednesday,
boosted by strong US earnings and upbeat comments by the head of the Federal
Reserve that helped propel equities as local currencies weakened against the
dollar.
In a second day of hearings, Federal Reserve Chair Jerome Powell told a
congressional panel that US businesses already are being hurt by tariffs on
key products, a prominent theme also in a Fed report on economic conditions
around the country.
But analysts said earnings are the big story right now, with forecasters
projecting that companies could average a 20 percent jump in earnings-per-
share compared with the year-ago period.
“The market focus has shifted to earnings, and so far earnings have been
stronger than expected and guidance has also been positive,” said Adam
Sarhan, founder of 50 Park Investments.
“In the near term, that is enough to help the market look at the bigger
picture and dismiss some of the negative headlines.”
The Dow and S&P 500 finished higher, while the Nasdaq essentially treaded
water.
Powell’s testimony followed an appearance Tuesday in which he said the US
central bank remained on track to continue gradually raising interest rates
amid solid US economic growth.
That boosted the dollar at the expense of the euro, yen and other
currencies — a factor that supported equity markets in Paris, Frankfurt and
Tokyo.
“A cheaper yen, prompted by Fed Chairman Powell’s congressional testimony,
is promoting purchases of exporters,” Okasan Online Securities said in a
commentary.
Meanwhile the pound briefly slid to a 2018 low at $1.3010 on receding
prospects of a UK interest-rate hike next month after British inflation
undershot expectations.
The pound has taken a knock this week also from uncertainty surrounding the
future of British Prime Minister Theresa May as she struggles to unite a
divided Conservative Party over the government’s Brexit strategy.
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In earnings news, United Continental shot up 8.8 percent as the airline
boosted its full-year earnings forecast to a range of $7.25 to $8.75 per
share from the prior range of $7.00 to $8.50. Delta Air Lines and American
Airlines also won solid gains.
Google-parent Alphabet dipped 0.2 percent as the European Union fined the
company 4.3 billion euros ($5 billion) for antitrust abuses with its Android
operating system. Google said it would appeal the penalty.
– Key figures at 2030 GMT –
New York – Dow: UP 0.3 percent at 25,199.29 (close)
New York – S&P 500: UP 0.2 percent at 2,815.62 (close)
New York – Nasdaq: DOWN less than 0.1 percent at 7,854.44 (close)
London – FTSE 100: UP 0.7 percent at 7,676.28 (close)
Frankfurt – DAX 30: UP 0.8 percent at 12,765.94 (close)
Paris – CAC 40: UP 0.5 percent at 5,447.44 (close)
EURO STOXX 50: UP 0.8 percent at 3,484.78 (close)
Tokyo – Nikkei 225: UP 0.4 percent at 22,794.19 (close)
Hong Kong – Hang Seng: DOWN 0.2 percent at 28,122.75 (close)
Shanghai – Composite: DOWN 0.4 percent at 2,787.26 (close)
Pound/dollar: DOWN at $1.3069 from $1.3115 at 2100 GMT
Euro/dollar: DOWN at $1.1639 from $1.1661
Dollar/yen: DOWN at 112.86 yen from 112.88 yen
Oil – Brent Crude: UP 74 cents at $72.90 per barrel
Oil – West Texas Intermediate: UP 68 cents at $68.76 per barrel
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