Wednesday 16th November 2016
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Tech stocks rose as investors took advantage of their post-US-election slump amid expectations that the outlook for their earnings remains in tact.
Shares of Amazon traded 2.8 percent higher as of 1.14pm, stemming the stock's four-day slide. Alphabet shares gained 3.1 percent, also halting a four-day slump.
"The underlying fundamentals of the economy hasn't really changed and if the economy is strong that will lead to more capital spending which should benefit tech stocks," Mark Watkins, regional investment manager at the Private Client Group at US Bank in Park City, Utah, told Reuters.
In 1.13pm trading in New York, the Nasdaq Composite Index climbed 0.7 percent. In 12.58pm trading, the Standard & Poor’s 500 Index added 0.2 percent. Meanwhile, the Dow Jones Industrial Average fell 0.1 percent from a record-high close.
Investors are still trying to gauge the impact of Donald Trump's upset victory in the US presidential elections last week.
“It’s still difficult to draw any firm conclusions about a long-term directional bias of stock sectors after the Trump election,” Michael Hewson, a market analyst at CMC Markets in London, told Bloomberg. “There have certainly been benefits in the aftermath for certain sectors like construction and financials, but volatility will persist.”
In the Dow, slides in shares of Home Depot and those of DuPont, down 2.6 percent and 1.6 percent respectively, outweighed gains in shares of Chevron and those of Verizon Communications, up 2.2 percent and 1.9 percent respectively.
Oil shares rose as the price of oil climbed amid signs of renewed efforts of OPEC to agree to reduce output to stem the global glut.
Shares of Exxon Mobil traded 1.7 percent higher as of 1.07pm in New York.
Meanwhile, Exxon is negotiating with Chad’s government about a record US$74 billion fine the oil company was told to pay last month by a court in the central African nation because of a dispute over royalties, Bloomberg reported. The penalty is almost six times Chad’s gross domestic product.
While Exxon has appealed the October 5 ruling by the High Court, the appeals court hearing has been delayed because of the talks, Thomas Dingamgoto, a lawyer for the company, told Bloomberg.
The latest US economic reports underpinned bets the Federal Reserve will raise its key interest rate at its next policy meeting in December.
Commerce Department data showed retail sales rose more than expected last month, gaining 0.8 percent.
"This is just the kind of data the Fed doves need to see to convince them to hike rates in December,” Chris Rupkey, chief economist at MUFG Union Bank in New York, told Reuters.
The economy is doing pretty well, this data is bullish for the economic outlook in the months ahead,” Rupkey noted.
In Europe, the Stoxx 600 Index finished the day with a 0.3 percent advance from the previous close. Germany’s DAX Index gained 0.4 percent, while the UK’s FTSE 100 Index rose 0.6 percent, as did France’s CAC 40 Index.
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