Thursday, July 25, 2024

World shares mostly higher as investors focus on US stimulus

by Associated Press

World shares were mostly higher on Wednesday as investors bet on eventual approval of a relatively big version of President Joe Biden’s pandemic relief bill. The advance followed a broad rally on Wall Street, with solid contributions from Big Tech companies, banks and other sectors.

Markets rose in Paris, London, Tokyo and Hong Kong but shares fell in Shanghai.

With Democrats and Republicans remaining far apart on support for President Joe Biden’s $1.9 trillion stimulus package, investors are betting that the administration will opt for a reconciliation process to get the legislation through Congress.

“Positive earnings reports as well as hopes for Biden’s fiscal rescue plan may have bolstered risk sentiment, with U.S. Senate Democrats announcing they would push through with the stimulus bill even without bipartisan support,” Prakash Sakpal and Nicholas Mapa of ING said in a report.

Germany’s DAX gained 0.8% to 13,950.15 and the CAC 40 in Paris advanced 0.8% to 5,605.20. Britain’s FTSE 100 picked up 0.7% to 6,562.90. Wall Street looked set for gains, with the future contract for the S&P 500 up 0.5% and that for the Dow industrials 0.2% higher.

In Asian trading, Tokyo’s Nikkei 225 rose 1% to 28,646.50 and the Kospi in South Korea climbed 1.1% to 3,129.68. Australia’s S&P/ASX 200 surged 0.9% to 6,824.60. The Hang Seng in Hong Kong recovered from early losses, gaining 0.2% to 29,307.91, while the Shanghai Composite index slipped 0.5% to 3,517.31.

On Tuesday, the S&P 500 index rose 1.4% to 3,826.31. The Dow Jones Industrial Average gained 1.6%, to 30,687.48. The tech-heavy Nasdaq composite climbed 1.6%, to 13,612.78. The Russell 200 index of smaller companies also rose, by1.2% to 2,151.44. The major indexes remain near their all-time highs set last month.

Shares in GameStop and other recent high-flying stocks hyped by online traders plunged. The stocks have been caught up in a speculative frenzy by traders in online forums and on social media who seek to inflict damage on Wall Street hedge funds that have bet these stocks would fall.

GameStop plunged 60% to $90 a share on Tuesday, and AMC Entertainment lost 41.2% to $7.82 a share. Both companies have been in the spotlight for more than two weeks as the online community of investors pushed the stocks to astronomical levels.

The price of silver, whose 9% spike on Monday fueled speculation the precious metal was also being hyped by online traders, sank by more than 10% on Tuesday. On Wednesday it was steady, gaining 52 cents to $26.93 an ounce.

The yield on the benchmark 10-year Treasury note rose to 1.12% from 1.10% late Tuesday.

Investors continue to focus on Washington. President Biden invited 10 moderate Republicans to the White House to discuss his proposed $1.9 trillion economic aid plan. Republicans earlier countered with an offer of $600 billion, or less than one-third of Biden’s proposed amount.

Stocks rose heading into 2021 on expectations the rollout of coronavirus vaccines would allow global business and travel to return to normal. That optimism has been dented by infection spikes and disruptions in vaccine deliveries.

In other trading, benchmark U.S. crude oil gained 48 cents to $55.24 per barrel in electronic trading on the New York Mercantile Exchange. It gained $1.21 on Tuesday to $54.76 per barrel. Brent crude, the international standard, picked up 62 cents to $58.08 per barrel.

The U.S. dollar rose to 105.06 Japanese yen from 104.98 yen late Tuesday. The euro edged lower, to $1.2040 from $1.2042.

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