While you were sleeping: Stocks shrug off Paris assaults

Tuesday 17th November 2015

Wall Street moved higher, following last week’s slide, as investors bet that the economic impact from the Islamic State-backed assaults in Paris will be limited.

France attacked ISIS targets in Syria for a second day after assaults in Paris killed at least 129 people.

“You wouldn’t expect the attack to have a lasting impact on financial markets,” Frances Hudson an Edinburgh-based global thematic strategist at Standard Life Investments, told Bloomberg. “It might be that the markets start looking again at fundamentals and company news. The US was off quite a long way on Friday. You would expect to see a bit of recovery from there.”

In New York trading at about 12:48pm, the Dow Jones industrial average rose 0.61 percent. At about 12.34pm trading, the Standard & Poor’s 500 Index gained 0.62 percent while the Nasdaq Composite Index added 0.20 percent.

Gains in shares of UnitedHealth and those of Exxon Mobil, last trading 2.1 percent and 1.8 percent higher respectively, helped propel the Dow higher.

Firm October US jobs data underpinned the likelihood of a Federal Reserve interest rate increase at the central bank’s meeting next month. Investors are eyeing the minutes of the Fed’s previous meeting, scheduled for release on Wednesday, for further clues on a rate increase, which would be the first in nearly a decade.

The US dollar strengthened.

“I think the market is still keeping it’s gaze on a December Fed decision,” Stephen Wood, chief market strategist for North America at Russell Investments in New York, told Bloomberg.

Futures indicate a 64 percent chance of a Fed hike next month.

Even so, a report showed the Empire State manufacturing index came in at minus 10.74 in November, contracting more than analysts had expected, even as it was an improvement from the previous month.

Oil prices fluctuated, with crude moving higher while Brent slipped.

"The Paris attacks cut both ways as far as the oil market is concerned," John Kilduff, a partner at Again Capital, a New York-based hedge fund, told Bloomberg. "It’s going to increase the geopolitical premium as oil infrastructure gets caught in the cross hairs of our warplanes. On the other hand, it’s negative for the euro-zone economy, which could lower demand while we are dealing with tremendous oversupply."

In Europe, the Stoxx 600 Index finished the session with a 0.3 percent advance from the previous close. Earlier in the session, it had dropped as much as 0.8 percent. Germany’s DAX Index eked out a 0.05 percent increase, while the UK’s FTSE 100 Index gained 0.5 percent. France’s CAC 40 Index slipped 0.08 percent.

BusinessDesk.co.nz

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