World stock markets and oil prices climbed yesterday, with earnings and gains in tech stocks lifting shares on Wall Street, while the euro rose on hopes Italy and the European Commission would reach a compromise on a dispute over Italy’s 2019 budget draft.
The recovery in United States tech and other momentum stocks boosted the benchmark S&P 500 stock index after it fell 3.5 per cent over the previous two sessions.
Strong earnings from Foot Locker Inc and Gap Inc boosted consumer discretionary stocks. The small-cap Russell 2000 index rallied nearly 2 per cent.
The European STOXX 600 index also rose 1.1 per cent as beaten-down stocks in the tech and banking sectors recovered.
Yesterday’s stock market activity showed signs of investors recovering their risk appetite, albeit in thin volume in US markets going into today’s Thanksgiving holiday, said Robert Phipps, director at Per Stirling Capital Management in Austin, Texas.
“There’s outperformance in tech stock and small caps. That’s normally viewed as a risk-on move,” Mr Phipps said.
“But volume equals validity, and I don’t expect to get lots of volume.”
US stock and bond markets will be closed today and open for a half-day tomorrow.
MSCI’s gauge of stocks across the globe gained 0.78 per cent.
The Dow Jones Industrial Average rose 159.93 points, or 0.65 per cent, to 24,625.57, the S&P 500 gained 25.65 points, or 0.97 per cent, to 2,667.54 and the Nasdaq Composite added 101.08 points, or 1.46 per cent, to 7,009.91.
Also reflecting positive investor sentiment, the euro rose on hopes that the Italian budget dispute would be resolved even as the European Commission took its first step toward disciplining Italy over its deficit.
The dollar index, which tracks the greenback against a basket of six major currencies, slipped 0.2 per cent after having advanced in Tuesday’s risk-off session.
Italian bonds rallied, pushing two-year yields down as much as 20 basis points.
Oil prices climbed after US government data showed strong demand for gasoline and diesel, though gains were limited by concern over rising crude supply. US crude prices had sunk to one-year lows after Tuesday’s selloff.
US crude surged 4.25 per cent to $55.70 per barrel. Brent crude futures rose to $64.02 a barrel, a 2.4 percent gain.
Benchmark 10-year notes last fell 10/32 in price to yield 3.0846 per cent, from 3.048 per cent late on Tuesday.