While you were sleeping: Wall St rises, dollar falls

Tuesday 13th October 2015

Wall Street moved higher, while the US dollar fell, as investors geared up for a flurry of corporate earnings including from banks and eyed talks from several Federal Reserve officials to gauge the odds of an interest rate increase this year.

In New York trading at about 2.25pm, the Dow Jones industrial average rose 0.2 percent, the Standard & Poor’s 500 Index eked out a 0.05 percent gain, while the Nasdaq Composite Index added 0.15 percent. Trading was a bit lighter than usual as Monday marked the Columbus Day federal holiday. The US bond market was closed.

"Earnings are now going to give investors a little more evidence of what's really going on," Andre Bakhos, managing director at Janlyn Capital in New Jersey, told Reuters.

This week offers results from companies including JPMorgan Chase, Citigroup, Bank of America, Goldman Sachs, General Electric, Intel and Netflix.

In the Dow, gains in shares of UnitedHealth and those of Visa, last up 2.4 percent and 1.5 percent respectively, outweighed slides in shares of Chevron and those of DuPont, last 1.5 percent and 0.8 percent weaker respectively.

Shares of Chevron dropped with the price of oil, as crude slid about 2 percent, following last week’s rally, after a report showed the output of Organisation of Petroleum Exporting Countries climbed to the highest in three years in September.

“Traders are seizing on the monthly OPEC report,” John Kilduff, a partner at Again Capital, a New York-based hedge fund, told Bloomberg. “OPEC pumping at the highest level in three years is a very bearish element. The decline in US production is a drop in the bucket compared with the OPEC increase.”

On the bright side, Chinese stocks continued the momentum of last week. The Shanghai Composite Index climbed 3.3 percent, up for a third straight session, amid bets on further central bank stimulus.

Reports on China’s trade and consumer prices in the next couple of days will offer further clues.

“As long as earnings are fair or better than the expectations, I think we’re going to be OK,” Andrew Brenner, the head of international fixed income for National Alliance Capital Markets, told Bloomberg. “All of sudden people are saying, well, China’s not so bad. Emerging markets are coming back. Oil is coming back. I’m looking for a grind higher.”

There was also fresh merger and takeover action. Dell agreed to buy EMC Corp for US$67 billion. The deal marks this year's third-largest in all sectors, according to Reuters.

"I don’t think either Dell or EMC were viable over the long run as a standalone; they really needed each other,” Eric Johnson, dean of the Owen Graduate School of Management at Vanderbilt University, told Reuters. "Dell was mostly on the consumer side, which is a terrible place to be. EMC had some enterprise products, but not the complete package."

In Europe, the Stoxx 600 Index ended the day with 0.3 percent slide from the previous close. France’s CAC 40 Index also fell 0.3 percent, while the UK’s FTSE 100 Index dropped 0.7 percent. Germany’s DAX Index rose 0.2 percent.

(BusinessDesk)

BusinessDesk.co.nz

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