Fed chief's confidence bolsters stocks, dollar
Jul 18, 2018 09:01 AM GMT+0530 | 0 Comment(s)
AFP - Stocks and the dollar rose on Tuesday as the head of the Federal Reserve said the economic outlook remained strong despite uncertainty over trade policy.
Upbeat about the US economy, Federal Reserve chief Jerome Powell began two days of congressional testimony on Tuesday by indicating the central bank would continue to raise rates gradually.
Investors "seemed to appreciate Mr. Powell's calm-but-confident delivery and the recognition that his remarks didn't introduce any volatility into the marketplace," said a note from Briefing.com.
US stocks reversed modest losses from the start of trading, with the Nasdaq barreling to a record close, while the dollar strengthened. The drop in the value of the euro and pound helped push European stocks into positive territory as well.
Stock markets mostly slid across Asia, led by share price falls for the energy sector one day after oil prices plunged on excess supply concerns.
Brent crude hit another three-month low Tuesday, at $71.35 per barrel, before recovering.
While painting a positive picture about the US economy, Powell acknowledged that it was "difficult to predict the ultimate outcome of current discussions over trade policy," a clear reference to the aggressive tariff policies adopted by President Donald Trump against China and other US trading partners.
Fears about a China-US trade war continue to nag investors, with both sides filing counter-complaints at the World Trade Organization after recently imposing and threatening further tariffs on billions of dollars worth of goods.
On Tuesday, the EU and Japan signed a sweeping free trade deal that officials called a "clear message" against protectionism, as Washington imposes tariffs and threatens a trade war.
Investors are also focused on the start of the corporate earnings season, with Netflix disappointing analysts on growth in the number of its subscribers.
Its shares plunged more than 14 percent in early trading on Tuesday before recovering some of those losses.
The streaming service said membership grew 5.2 million to 130 million, a million shy of what the company had forecast. Shares finished the day down 5.2 percent.
Goldman Sachs dipped 0.2 percent after reporting a 44 percent jump in second-quarter earnings to $2.3 billion and announcing that David Solomon would succeed Lloyd Blankfein as chief executive.
In Germany, shares in Thyssenkrupp jumped 9.1 percent as the departure of another key executive boosted chances that activist investors would succeed in their effort to split apart the industrial conglomerate.
- Key figures at 2030 GMT -
New York - Dow: UP 0.2 percent at 25,119.89 (close)
New York - S&P 500: UP 0.4 percent to 2,809.55 (close)
New York - Nasdaq: UP 0.6 percent at 7,855.12 (close)
London - FTSE 100: UP 0.3 percent at 7,626.33 (close)
Frankfurt - DAX 30: UP 0.8 percent at 12,661.54 (close)
Paris - CAC 40: UP 0.2 percent at 5,422.54 (close)
EURO STOXX 50: UP 0.2 percent at 3,457.50 (close)
Tokyo - Nikkei 225: UP 0.4 percent at 22,697.36 (close)
Hong Kong - Hang Seng: DOWN 1.3 percent at 28,181.68 (close)
Shanghai - Composite: DOWN 0.6 percent at 2,798.31 (close)
Euro/dollar: DOWN at $1.1662 from $1.1711 at 2100 GMT
Pound/dollar: DOWN at $1.3113 from $1.3235
Dollar/yen: UP at 112.84 yen from 112.29 yen at 2100 GMT
Oil - Brent Crude: UP 32 cents at $71.84 per barrel
Oil - West Texas Intermediate: UP 2 cents at $68.08 per barrel