Stocks crept higher worldwide yesterday as investors looked past US President Donald Trump’s protectionist rhetoric and focused on encouraging economic data and quarterly earnings reports.
The US dollar firmed against the yen and euro after losses in the wake of President Trump’s inaugural speech promising more trade protectionism, while US Treasury yields recovered from Monday’s slide.
MSCI’s world index, which tracks shares in 46 countries, was up 0.33 per cent, helped by signs of a revival of economic activity around the world.
Japanese manufacturing showed the fastest expansion in almost three years and a five-and-a-half-year peak in French business activity provided the latest proof of a nascent eurozone recovery.
US stocks recovered ground after Monday’s dip.
With earnings gathering pace, investors are hoping that corporate performance can justify market valuations, given the recent rally that drove Wall Street to record highs.
The Dow Jones Industrial Average rose 57.35 points, or 0.29 per cent, to 19,857.2, the S&P 500 gained 7.57 points, or 0.33 per cent, to 2,272.77 and the Nasdaq Composite added 17.67 points, or 0.32 per cent, to 5,570.61.
Yahoo rose four per cent after the company reported better-than-expected quarterly profit and revenue and said the sale of its core internet business to Verizon should be completed in the second quarter.
European earnings season got off to a rocky start with profit warnings from BT Group and Aryzta sending their shares sharply lower, but the weakness was offset by gains in Italian financials and mining stocks.
Europe’s broad FTSEurofirst 300 index was up 0.26 per cent at 1,429.14.
The US dollar rebounded against the yen and euro , offsetting recent losses related to the change in US leadership, as bargain hunters stepped in and bought back the currency still viewed as having the best economic outlook in the developed world.
The dollar index, which measures the greenback against six major rivals, was little changed at 100.100.
The steadier dollar weighed on gold prices, which fell from a two-month peak.
Spot gold was down 0.39 per cent to $1,212.66 an ounce.
US Treasury debt yields rose, in step with their European counterparts, following a high court ruling on Britain’s decision to quit the European Union and encouraging data on eurozone manufacturing.
Yields, however, pared some gains as US existing home sales fell as supply hit a 17-year low, reviving worries about the housing sector.
The yield on benchmark 10-year US Treasury notes was up 3 basis points at 2.428 per cent.
Oil prices rose on evidence that the market is tightening as lower production by Opec and other exporters drains stocks, though increased drilling in the United States could keep a lid on prices.
Brent crude was up 0.71 per cent at $55.62 a barrel, while US crude was up 1.18 per cent at $53.37.