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Global Markets: U.S. stocks rise on oil, strong earnings as dollar gains

Reuters  |  NEW YORK 

By Hilary Russ

NEW YORK (Reuters) - The stock index hit a four-month high on Tuesday, boosted by and strong earnings, while the U.S. dollar rose against the safe-haven as investors bought riskier assets.

World share markets remained near three-week highs, supported by optimism about U.S. company earnings and the notion that global economic growth can withstand trade tensions.

"The first major earnings report came out, and PepsiCo's earnings beat expectations and that's a good start for the market," said Peter Cardillo, at in New York.

were also lifted by oil prices, which rose due to growing supply outages as shut one oilfield amid a worker strike and said production fell by more than half in recent months.

Brent crude - up almost 20 percent this year - was last at $78.71, up 0.82 percent on the day. U.S. crude rose 0.22 percent to $74.01 per barrel.

The Dow Jones Industrial Average rose 128.19 points, or 0.52 percent, to 24,904.78, the gained 7.66 points, or 0.28 percent, to 2,791.83 and the added 11.46 points, or 0.15 percent, to 7,767.66.

Second-quarter U.S. corporate results start in earnest this week and are expected to showcase earnings growth of over 20 percent across all sectors, thanks to recent tax cuts, and robust economic growth.

The pan-European index rose 0.41 percent and MSCI's gauge of stocks across the globe gained 0.15 percent.

Investors have not forgotten about the underlying potential for an escalated trade war after and the slapped tit-for-tat tariffs on $34 billion worth of each other's goods. Even so, no fresh salvos have since been fired.

Most analysis suggests that trade measures are not going to have a big impact on global growth, said Thierry Wizman, global interest at Macquarie Group Limited.

"Even if the trade concerns were still there, (investors) would be confronting a better earnings outlook in 2018, so that's another consideration that's keeping risk appetite strong," he said.

German export figures and Chinese factory gate prices this week have also offered reassurance on economic momentum.

The risk-on sentiment nudged the U.S. dollar toward a six-month high against the yen, with the greenback poised for a further boost if consumer price inflation figures come in higher than expected on Thursday.

The dollar index rose 0.15 percent, with the euro down 0.18 percent to $1.1728.

In Britain, sterling has been pressured by fears that cabinet resignations could lead to rebellion in the ruling party's ranks, toppling or triggering fresh elections.

While this looks unlikely, the uncertainty caused sterling to sink as low as $1.3225 before recovering.

However, a rate hike may also support the pound, with markets assigning a roughly 60 percent chance of a 25 basis-point rate hike in August.

Politics dominated Turkey, where Tayyip Erdogan's new cabinet lacked market-friendly names and included instead his as minister.

Turkish five-year credit default swaps, used to insure against default or restructuring, rose more than 20 basis points, while the lira gave up initial gains that had helped to reverse some of Monday's 3 percent fall.

(Additional reporting by in London, Amy Caren Daniel in Bengaluru, Kate Duguid in New York; Editing by Dan Grebler)

(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

First Published: Tue, July 10 2018. 21:11 IST