Saturday, May 25, 2024

Wall Street opens higher, following gains in overseas stocks

by Associated Press

NEW YORK (AP) — Stocks are opening solidly higher on Wall Street, following up on gains in overseas markets. The S&P 500 climbed another 0.5% in early trading Wednesday. Treasury yields and small-company stocks rose, both signals that pessimism about the prospects for the economy may be diminishing. Prices for crude oil and gold also rose. Disney rose after reporting earnings that, despite being down sharply from a year earlier because of coronavirus shutdowns, still managed to beat the forecasts of Wall Street analysts. Financial companies were doing particularly well. Prudential Financial climbed after reporting better-than-expected results in its latest quarter.

Global markets and U.S. stock futures rose Wednesday as investors monitor U.S. talks on more stimulus spending and a U.S. trade pact with China.

Indexes rose in London and Frankfurt, while Shanghai, Hong Kong and Seoul closed higher but Tokyo declined. Gold rose to a new record.

Investors are watching the stalemate among U.S. legislators over employment benefits for millions of Americans thrown out of work by the coronavirus pandemic and spending to shore up anemic economic growth.

At the same time, news reports from Washington said Chinese and American trade envoys will meet this month to review their “Phase 1” agreement aimed at ending a tariff war. That follows President Donald Trump’s threat to discard the agreement over Beijing’s handling of the coronavirus pandemic.

Traders see that as a sign of “commitment to ensuring the agreement holds” despite escalating U.S.-Chinese tension, Stephen Innes of AxiTrader said in a report.

In Europe, the FTSE 100 in London gained 1.1% to 6,099 after new data showed car sales rising in July for the first time this year. Frankfurt’s DAX advanced 0.8% to 12,699 and the CAC 40 in France added 0.9% to 4,931 after eurozone statistics showed retail sales were rebounding quickly as shops reopened.

On Wall Street, the future for the benchmark S&P 500 index was up 0.6% and that for the Dow Jones Industrial Average was 0.7% higher.

In Asia, the Shanghai Composite Index gained 0.2% to 3,377.56 while the Nikkei 225 in Tokyo lost 0.3% to 22,514.85. The Hang Seng in Hong Kong rose 0.6% to 25,102.54.

The S&P-ASX 200 in Sydney fell 0.6% to 6,001.30 while Seoul’s Kospi gained 1.4% to 2,311.86. India’s Sensex was little-changed at 37,691.69.

In commodity markets, the price of gold rose $35.90 to $2,056.90.

Investors have been buying gold and silver, usually seen as a store of value if stock prices decline. Forecasters see that as an indicator of rising unease about the global economic outlook. It can also reflect expectations that central banks will continue to keep interest rates low for a long time, which could result in higher inflation.

Adding to some jitters was a huge explosion in Beirut that killed at least 70 people, injured more than 3,000 and flattened much of the Lebanese capital’s port. The cause of the most destructive blast in the country’s history was unclear.

Global markets have recovered most of this year’s losses as investors look ahead to the possible development of a coronavirus vaccine. Forecasters warn the rebound might be too big and fast to be sustained by uncertain economic activity as infections rise in the United States and some other countries.

Legislators in Washington are at odds over a relief package including a replacement for $600 weekly unemployment benefits that expired last week.

The number of people filing for unemployment is rising after a resurgence of infections pushed some states to reimpose controls on business.

Economists expect a report Friday to show U.S. employers added 1.8 million jobs last month, which would be welcome growth but also a slowdown from June.

For now, investors are relying on the Federal Reserve, which said last week it would keep interest rates near zero. At the same time, Fed Chairman Jerome Powell said Congress needs to take action.

“Markets are betting on the Fed picking up the slack more permanently even from temporary fiscal stimulus lapses and convulsions,” Hayaki Narita of Mizuho Bank said in a report.

In energy markets, benchmark U.S. crude rose $1.60 to $43.30 per barrel in electronic trading on the New York Mercantile Exchange. Brent crude, the basis for pricing international oils, gained $1.61 to $46.04 per barrel in London.

The dollar edged up to 105.75 yen from Tuesday’s 105.72 yen. The euro gained to $1.1853 from $1.1805.

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