Stock markets around the world rose yesterday as investors moved into riskier assets for a second straight day, though a rise in the US dollar could a headwind for further gains.
Potential deal activity boosted equities on Wall Street and in Europe, a positive that added to the growing conviction that the US Federal Reserve would not raise interest rates until after the summer. Crude oil rallied and was having its biggest weekly gain since February 2011.
Recent stocks gains have been tied to last week's US payrolls report, which was much weaker than expected.
While the data, along with other recent indicators, pointed to slowing US growth, market participants viewed it as a positive by suggesting the Fed would delay boosting rates.
The US dollar has rallied since mid-2014 on expectations for a rise in rates. While a delay would be a negative for the greenback, investors took advantage of recent weakness in the currency, bidding the US dollar solidly higher.
On the takeover front, FedEx Corp offered to buy Dutch package-delivery company TNT Express for $4.8 billion, the latest in a series of multi-billion-dollar deals.
“This is a good sign for markets, indicating that companies see value, especially in the long term, but (equity) moves could be tepid if we continue to see this kind of trend in the dollar,” said Matt Lloyd, chief investment strategist at Advisors Asset Management in Monument, Colorado.
At midday, the Dow Jones industrial average was up 91.26 points, or 0.51 per cent, at 17,972.11. The Standard & Poor's 500 Index was up 7.20 points, or 0.35 per cent, at 2,087.82. The Nasdaq Composite Index was up 27.53 points,or 0.56 per cent, at 4,944.85.The MSCI International ACWI Price Index rose 0.2 per cent.
The pan-European FTSEurofirst index of leading 300 shares gained 1.6 per cent.
European equities, which were closed Monday for the Easter holiday, were also supported by comments from Greek Finance Minister Yanis Varoufakis, who on Sunday said the country intended “to meet all obligations to all its creditors, ad infinitum,” seeking to quell fears of a default.
In currency trading, the US dollar index, which measures the greenback against a basket of currencies, rose 0.9 per cent. The euro fell 0.7 per cent to $1.0848 while the yen fell 0.7 per cent against the dollar.