US stocks end higher after late surge as European bourses stumble

AFP – Wall Street stocks finished solidly higher Thursday following a late session surge after European markets suffered deep declines that dented investor hopes of finishing 2018 with gains.

Volatility again reigned supreme across global markets as investors wrestled with worries over slowing global growth, trade wars, the Brexit morass and a US government shutdown, as well as President Donald Trump’s attacks on the US central bank.

Wall Street, after staging its best rally in nine years the day after Christmas, opened meekly on Thursday and losses accelerated following disappointing consumer confidence data.

But a rally in the session’s last 30 minutes caused the Dow to stage a comeback, ending up 1.1 percent at the close at 23,138.82 as worries over the economy gave way to bargain-hunting. That was an 870-point recovery from the low point of the session.

But even with the gains in the last two days, the blue-ship index is down more than six percent for 2018.

Briefing.com described trading on Thursday as a "tale of two sessions."

"The bulk of the trading day was marred by an inclination to sell into strength, which fed into worries that this market had more downside to come. The last part of the trading day, however, featured a huge rally from session lows that eviscerated the downbeat sentiment seen in the first part of the day."

Some analysts said the pullback in US stocks in recent weeks was exaggerated, given solid employment and US growth data. But others expressed concern over expectations for slower US growth next year, with some forecasting a recession in 2020.

Pantheon Macroeconomics Chief Economist Ian Shepherdson said US stocks could be primed to rally next year if Trump seals a trade deal with China, something he argued was likely given the US president’s fixation on the stock market.

"Ask yourself how you’d like to be positioned right now if you knew that the trade war would be over and all the tariffs removed tomorrow," Shepherdson said.

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"By most objective measures, then, US stocks are now pretty cheap, if the president gets out of the way."

– Losses in Europe –

European equities, meanwhile, ignored the previous day’s gains on Wall Street, with Frankfurt shedding a whopping 2.4 percent, after having plunged by more than three percent at one point during the afternoon.

Frankfurt is now nearly 20 percent down from the start of the year, London has declined more than 14 percent and Paris more than 13 percent.

"The rally which we experienced over on Wall Street yesterday has hit the wall," ThinkMarkets analyst Naeem Aslam told AFP.

"Investors are busy profit-taking. Basically, we are struggling for the momentum to continue."

In Asia, equities in Tokyo sparkled, but Chinese stocks slid on weak data showing that profits in the industrial sector declined 1.8 percent in November.

Hong Kong lost 0.7 percent and Shanghai shed 0.6 percent.

– Key figures around 2150 GMT –

New York – Dow: UP 1.1 percent at 23,138.82 (close)

New York – S&P 500: UP 0.9 percent at 2,488.83 (close)

New York – Nasdaq: UP 0.4 percent at 6,579.49 (close)

London – FTSE 100: DOWN 1.5 percent at 6,584.68 (close)

Frankfurt – DAX 30: DOWN 2.4 percent at 10,381.51 (close)

Paris – CAC 40: DOWN 0.6 percent at 4,598.61 (close)

EURO STOXX 50: DOWN 1.2 percent at 2,937.36 (close)

Tokyo – Nikkei 225: UP 3.9 percent at 20,077.62 (close)

Hong Kong – Hang Seng: DOWN 0.7 percent at 25,478.88 (close)

Shanghai – Composite: DOWN 0.6 percent at 2,483.09 (close)

Euro/dollar: UP at $1.1436 from $1.1353 at 2200 GMT

Dollar/yen: DOWN at 111.02 yen from 111.37 yen

Pound/dollar: UP at $1.2650 from $1.2633

Oil – Brent Crude: DOWN $2.31 at $52.16 per barrel

Oil – West Texas Intermediate: DOWN $1.61 at $44.61 per barrel

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