Tuesday, July 23, 2024

Banks, energy stocks lead indexes higher in early trading.

by Associated Press

Stocks are opening higher on Wall Street at the end of an up-and-down week, led by gains in banks and energy companies. If the early gains hold, the S&P 500 could narrowly avoid its second weekly loss in a row. The index was up 0.5% early Friday. Tech companies lagged the rest of the market. The yield on the 10-year Treasury note rose to 1.67% and the price of crude oil climbed 3.8%, its latest sharp move. Banks rose after the Federal Reserve said it would lift limits on the dividends banks can pay and the share buybacks they can make.

Shares opened higher in Europe after gains in Asia on Friday driven by hopes for a strong recovery from the pandemic.

Paris, London and Tokyo advanced and U.S. futures also were higher. Investors appeared to be shrugging off a resurgence of coronavirus cases in many areas and focusing on signs economies are on the mend.

Hopes that economies will regain ground lost since last year’s first outbreaks of coronavirus thanks to COVID-19 vaccinations and huge amounts of government have helped support stocks.

“Although very much in the price, investors did take solace as the positive outlook for vaccines amid President Joe Biden’s plan for an ‘economic rejuvenation,’ which underpinned risk overnight,” Stephen Innes of Axi said in a commentary.

Germany’s DAX rose 0.9% to 14,7521.53 and the CAC 40 in Paris climbed 0.7% to 5,990.86. Britain’s FTSE 100 jumped 0.7% to 6,722.31. The futures for the S&P 500 and the Dow industrials both gained 0.3%.

In Asian trading, Tokyo’s Nikkei 225 index surged 1.6% to 29,176.70 and the Hang Seng in Hong Kong picked up 1.6% to 28,340.97. In Seoul, the Kospi rose 1.1% to 3,041.01. The Shanghai Composite index climbed 1.6% to 3,418.33 and India’s Sensex gained 1.3% higher.

On Thursday, the S&P 500 rose 0.5% to 3,909.52, but was still on track for a loss for the week.

Investors have been moving money away from expensive tech stocks as part of a broader shift to stocks tied more closely to economic growth. There’s a good chance the recovery could be surprisingly strong with little interference from the Federal Reserve, said Andrew Slimmon, portfolio manager at Morgan Stanley Investment Management.

“There is a very clear message that the Fed is going to sit back and let the economy grow at a hotter rate because their number one priority is unemployment,” he said. “That means there’s a good chance the economy overshoots.”

The Dow Jones Industrial Average gained 0.6% to 32,619.48. The tech-heavy Nasdaq composite recovered from early losses to edged 0.1% higher, to 12,977.68. The Russell 2000 index of smaller stocks outdid the rest of the market, climbing 2.3% to 2,183.12.

The 10-year Treasury yield, which helps set rates for all kinds of loans, edged up to 1.64%. Treasury yields have been broadly rising with expectations for stronger economic growth and the inflation that may accompany it.

Apart from the upbeat jobless report, another report said the U.S. economy grew at a faster pace at the end of 2020 than earlier estimated.

In other trading Friday, U.S. benchmark crude oil gained $1.56 to $60.12 per barrel in electronic trading on the New York Mercantile Exchange. It sank $2.62 on Thursday to $58.56 per barrel.

Brent crude, the standard for international pricing, picked up $1.51 to $63.31 per barrel.

The U.S. dollar rose to 109.45 Japanese yen from 109.19 yen late Thursday. The euro rose to $1.1787 from $1.1766.

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