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Technology Shares Climb on Tax Accord, Oil Tumbles

Thursday 23rd January 2020

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Technology shares rallied on the back of upbeat earnings and after the U.S.

and France struck a deal on digital taxation. Oil tumbled on concern the

market is oversupplied.


The Nasdaq Composite Index headed for a record and the S&P 500 edged

higher after France agreed to delay collecting a tax on multinational digital

companies, possibly averting a transatlantic trade war. Gains were limited

by concern about the potential impact of a deadly respiratory virus that

originated in China, even as the country moved to contain the outbreak.

IBM gained after revenue beat estimates. Tesla Inc.’s market value soared

past $100 billion.


With stocks trading near records, investors are on alert for any

developments that could derail the momentum and had taken a cautious

stance amid concern the virus that originated in China and has already

killed 17 people could turn into a global pandemic that dents economic

growth. A sense that China is coming to grips with containing the illness

gave traders the chance to hunt for bargains following yesterday’s declines.


“The market seemingly wants to look at the positive and recover quickly as

soon as it gets a chance,” Ann Miletti, head of active equities at Wells Fargo

Asset Management, said in an interview at Bloomberg’s New York

headquarters. “Clearly fiscal and monetary policy set us up pretty well for

the growth that we will likely see in earnings for 2020.”


Bob Prince, co-chief investment officer at Bridgewater Associates, discusses

the end of the boom-bust cycle, finding opportunity in market stability, and

the firm’s investment strategy. He speaks at the World Economic Forum’s

annual meeting in Davos, Switzerland.


Elsewhere, Chinese shares eked out a gain and the yuan steadied after

Beijing said it will start a nationwide screening effort to tackle the outbreak

of the Wuhan virus. The Stoxx Europe 600 Index dipped as Italian banks

slumped amid a fresh bout of political turmoil.


West Texas oil fell below $58 a barrel as ample global supplies offset the

loss of exports from Libya. The pound strengthened after Prime Minister

Boris Johnson’s Brexit deal cleared its final hurdles in Parliament.


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