Global stocks gain as upbeat Wall Street earnings lift outlook

The Dow Jones Industrials and S&P 500 closed at record highs on Monday as traders looked ahead to earnings reports. — Reuters pic
The Dow Jones Industrials and S&P 500 closed at record highs on Monday as traders looked ahead to earnings reports. — Reuters pic

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NEW YORK, Oct 26 ― Global stocks rose and Treasury yields dipped yesterday with major Wall Street benchmarks hitting fresh records, buoyed by a robust start to the US corporate earnings season and an improving economic outlook.

A large proportion of S&P 500 companies are due to report results this week, including technology heavyweights Facebook, Apple Inc, Amazon, Microsoft, and Alphabet, which have been the drivers of the market rally this year. The Dow Jones Industrials and S&P 500 closed at record highs yesterday as traders looked ahead to earnings reports.

“The number one thing is that earnings are better-than-expected and what's more interesting is that as we approach the end of the year, we're going to see forward guidance being lifted, which would make the market multiple more reasonable,” said Thomas Hayes, chairman of Great Hill Capital in New York. The MSCI world equity index, which tracks shares in 50 countries, rose 0.28 per cent, while the pan-European STOXX 600 index gained 0.07 per cent. In choppy trading yesterday, US Treasury yields were lower as uncertainty about when the Federal Reserve would raise rates to curb rising inflation weighed on market sentiment.

The benchmark US 10-year yield fell to 1.6325 per cent. Last week, the 10-year yield hit 1.705 per cent, the highest since mid-May.

The US dollar rose from a one-month low yesterday, ahead of central bank meetings and economic data coming later this week, boosted by the prospect of a tighter US monetary policy. The dollar index was up 0.178 per cent at 93.828.

On Wall Street, the group of stocks with the highest gains were consumer discretionary, industrials, communication services and technology stocks.

A string of solid quarterly earnings reports this month, including JP Morgan Chase & Co and Goldman Sachs Group Inc and insurer Travelers Cos Inc, have boosted market expectations.

Tesla, which jumped 12.66 per cent and breached US$1 trillion (RM4.15 trillion) in market capitalisation, also provided the biggest boost to the S&P 500 and the Nasdaq.

The Dow Jones Industrial Average rose 0.18 per cent to 35,741.15, the S&P 500 gained 0.47 per cent to 4,566.48 and the Nasdaq Composite added 0.9, to 15,226.71. Oil prices rose on Monday and reached multi-year highs, as tight global supply and strengthening fuel demand in the United States and beyond supported prices.

Brent crude futures gained 0.43 per cent to US$85.90 a barrel, while the US West Texas Intermediate (WTI) crude futures pared earlier gains and traded lower at 0.06 per cent to US$83.71 a barrel in early afternoon trading.

Gold prices rose nearly 1 per cent yesterday, as a retreat in US bond yields and persistent worries about inflation lifted the safe-haven asset ahead of major central bank meetings this week. Spot gold gained 0.85 per cent to US$1,807.7102 per ounce, while US gold futures for December delivery settled up 0.6 per cent at US$1,806.80 per ounce. ― Reuters

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