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Saturday, October 23, 2021

US stocks shoot higher as dollar retreats

US stocks shoot higher as dollar retreatsNEW YORK: Wall Street stocks returned to full-throttle rally mode Friday behind strong earnings from Intel and other companies, while the dollar resumed its retreat.

All three major US indices surged to fresh records, with the Dow scoring its third straight all-time high and both the S&P 500 and Nasdaq winning more than one percent.

“The bullish sentiment remains in place, and while we have seen some earnings shortfalls, it has still been a very constructive earnings season for the broader economy and the stock market,” said Gorilla Trades strategist Ken Berman.

Investors shrugged off government data that put fourth-quarter US growth at 2.6 percent, below the 2.9 percent expected by analysts.

Instead, the focus was on strong earnings from Intel, which shot up more than 10 percent, and pharmaceutical company AbbVie, whose bullish forecast ignited other drugmakers and biotech stocks.

The records follow numerous earlier equities milestones in the wake of US tax cuts enacted last month. Company earnings announcements over the last several days have signaled higher profits ahead, further cheering investors.

Meanwhile, European stock markets rebounded from a round of heavy selling seen the previous day, but some analysts said the continent’s equity investors lacked conviction.

“Even though equities are in positive territory the level of enthusiasm isn’t anything special, and it feels like a lacklustre rally,” said David Madden, market analyst at CMC Markets UK.

Oil prices moved higher, with US benchmark West Texas Intermediate finishing at its highest level since December 2014.

But the dollar saw renewed selling pressure after a brief upward spurt on Thursday following President Donald Trump’s support of a strong greenback.

“The euro-buying sentiment is expected to stay strong as investors are convinced that the (European Union) remains on course for (monetary) normalization this year,” Masakazu Satou, analyst at Gaitame Online told AFP, referring to a wind-down of the ECB’s crisis-era stimulus.

And Stephen Innes, head of Asia-Pacific trading at OANDA, said the greenback could see more losses owing to Trump’s desire to help US manufacturers and exporters as part of his America First policy.

“The weaker dollar narrative remains intact for 2018,” he said.

Copyright AFP (Agence France-Press), 2018

Source: Brecorder.com

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