Business Market 29 Oct 2016 US stocks up on stro ...

US stocks up on strong GDP data, oil prices down

REUTERS
Published Oct 29, 2016, 10:44 am IST
Updated Oct 29, 2016, 10:45 am IST
MSCI's global stock index was 0.12 per cent higher. Its broadest index of Asia-Pacific shares outside Japan was down 0.32 per cent.
In Japan, the weak yen helped to lift the Nikkei 225 index by 0.6 per cent for a weekly rise of 1.5 per cent.
 In Japan, the weak yen helped to lift the Nikkei 225 index by 0.6 per cent for a weekly rise of 1.5 per cent.

New York: US stocks and government debt yields climbed on Friday, cheered by stronger-than-expected growth in the world's biggest economy that boosted bets on an imminent US rate increase, while oil prices fell amid a persisting global glut.

On Wall Street, stock indexes were higher around midday, with Chevron shares rising 3.82 per cent after beating quarterly profit expectations.

 

Healthcare, which had buoyed the benchmark S&P 500 index in previous sessions, was the only negative sector due to results from Amgen and AbbVie.

An estimate of US second-quarter gross domestic product showed annualized economic growth of 2.9 per cent, the fastest rate in two years. However, the boost came largely from a recovery in inventories and a jump in agricultural exports after poor soy harvests in

Argentina and Brazil this year benefited sales by American exporters.

Meanwhile, business investment in equipment contracted for a fourth straight quarter and personal consumption growth slowed to 2.1 per cent from 4.3 per cent.

 

The Dow Jones industrial average rose 52.6 points, or 0.29 per cent, to 18,222.28, the S&P 500 gained 4.75 points, or 0.22 per cent, to 2,137.79 and the Nasdaq Composite added 7.41 points, or 0.14 per cent, to 5,223.38.

Europe's index of leading 300 shares was last down 0.35 per cent; Germany's DAX slipped by 0.15 per cent and the STOXX 600 fell 0.32 per cent.

MSCI's global stock index was 0.12 per cent higher. Its broadest index of Asia-Pacific shares outside Japan was down 0.32 per cent, pressured by the prospect of easy money flows being crimped should the US Federal Reserve tighten policy.

 

In Japan, the weak yen helped to lift the Nikkei 225 index by 0.6 per cent for a weekly rise of 1.5 per cent.

Yields climb

In a week marked by deep slides in prices of US and European debt, the benchmark 10-year Treasury yield climbed to a five-month high on Friday just below 1.88 per cent, helped by surging British gilt and German bund yields .

The 10-year Treasury notes were last at 1.86 per cent.

Bond yields have risen recently amid concerns the ultra-easy policies of major central banks could have their limits and may not be continued indefinitely.

 

The robust US GDP data for the third quarter helped pushed Treasury yields higher, with the rates futures markets now pricing in a more than 80 per cent chance the Federal Reserve would tighten rates at its December policy meeting.

Deutsche Bank's John Reid said bond markets were living a "nightmare" moment, Rabobank analysts deemed the recent sell-off a "bloodbath" and Bank of America Merrill Lynch warned of an "angry rise" in yields in the weeks ahead.

Germany's 10-year bund yield earlier rose to 0.219 per cent, its highest since early May. It later reversed course on Friday, with prices rising and the yield falling to 0.17 per cent.

 

The US dollar reversed losses against the yen, last up 0.11 per cent at 105.38, but it was still off the three-month high it touched on Friday of 105.50.

The dollar index, which measures the greenback against a basket of six major currencies, was last down 0.18 per cent at 98.706.

Oil prices fell below $50 a barrel and were set for their biggest weekly losses in six weeks on investor doubts over OPEC's planned output cut and ahead of US rig count data that has steadily increased in the last few months.

Brent crude was down 0.42 per cent, or 21 cents, at $50.26 a barrel and US crude was 0.44 per cent, or 22 cents, lower at $49.51.

 

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