While you were sleeping: Wall St rallies

Tuesday 12th September 2017

Wall Street rallied, while US Treasuries dropped, as concern about geopolitical tensions and the impact from Hurricane Irma, which eased to a tropical storm as of Monday, declined.

In 2.27pm trading in New York, the Dow Jones Industrial Average rallied 1.2 percent, while the Nasdaq Composite Index climbed 1.1 percent. In 2.12pm trading, the Standard & Poor’s 500 Index advanced 1.1 percent.

US Treasuries slid, pushing yields on the 10-year note eight basis points higher to 2.13 percent.

The US dollar rose, while the euro and the Japanese yen weakened.

“The better risk environment has seen Treasury yields move higher while the yen retreated,” Chris Scicluna, the head of economic research at Daiwa Capital Markets in London, wrote to clients, Bloomberg reported. Hurricane Irma appeared “not to be quite as catastrophic as had been feared last week” and “thankfully there was no bad weekend news out of North Korea.”

The Dow moved higher, led by gains in shares of DowDuPont and those of Travelers, recently up 3.4 percent and 2.7 percent respectively. Bucking the trend were shares of Home Depot and those of General Electric, recently down 1.1 percent and 0.2 percent respectively, for the only two declining stocks in the Dow.

“It is a risk back on situation, people are going back into the market,” Neil Massa, senior equity trader at Manulife Asset Management in Boston, told Reuters. “For now, it is a relief rally for things on both ends—geopolitical and weather wise—as it did not come in too bad.”

Wall Street’s fear gauge—the CBOE Volatility Index or the VIX—dropped 10.8 percent to 10.81.

Citigroup shares rose, up 2.2 percent as of 2.29pm in New York. Chief Financial Officer John Gerspach said trading revenue is set to fall 15 percent in the third quarter from a year earlier, according to media reports. He spoke on Monday at a conference in New York.

Shares of Apple rose, up 1.5 percent as of 2.38pm in New York, a day before the company is set to unveil its latest products including three iPhones.

In Europe the Stoxx 600 Index finished the session with a 1 percent advance from the previous close. The UK’s FTSE 100 Index rose 0.5 percent, France’s CAC 40 Index gained 1.2 percent, while Germany’s DAX Index jumped 1.4 percent.

As European Central Bank policy makers are set to gather on Thursday, Executive Board member Benoit Coeure warned that the rising euro could depress inflation unless it’s offset by a strengthening economy, Bloomberg reported.

“Exogenous shocks to the exchange rate, if persistent, can lead to an unwarranted tightening of financial conditions with undesirable consequences for the inflation outlook,” Coeure said in Frankfurt on Monday. “Against this background, the recent volatility in the exchange rate represents a source of uncertainty which requires monitoring.”

(BusinessDesk)

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