BackUS stocks keep winning streak, sterling drops
S&P and Dow erase earlier losses on tech, telecom sectors; sterling tumbles as poor UK data stoke recession worries; oil prices on track for weekly decline
Premium
New York: US stock prices rose on Friday, marking four straight weeks of gains, while sterling dropped on bleak data that raised fears about a possible British recession following the country’s 23 June vote to leave the European Union.
Concerns about global oversupply hurt oil prices, putting them on track for weekly losses.
Bond and gold prices fell on expectations the Federal Reserve may raise interest rates by year-end following the recent batch of encouraging US economic data.
“Earnings have been positive for the most part. You have a strong package of data that have been constructive on the equity market, pushing up bond yields and even taking some shine off gold’s recent strong performance," said Quincy Krosby, market strategist at Newark, New Jersey-based Prudential Financial.
The key US S&P and Dow equity indexes reversed earlier losses, edging towards record highs they hit earlier this week, on renewed strength in the tech and telecom sectors and a stronger-than-expected report on manufacturing. The S&P and Dow had fallen earlier on disappointing news from companies like General Electric and Honeywell.
In late US trading, the Dow Jones industrial average was up 50.95 points, or 0.28%, at 18,568.18, the S&P 500 was up 9.67 points, or 0.45%, at 2,174.84 and the Nasdaq Composite was up 25.59 points, or 0.5%, at 5,099.49.
Europe’s broad FTSEurofirst 300 index ended little changed at 1,344.11, paring earlier losses linked to lower mining shares and Swedish construction from Skanska.
Japan’s Nikkei closed down 1.1%.
The MSCI world equity index, which tracks shares in 45 nations, rose 0.3 points or 0.07%, to 412.73.
Among major currencies, sterling booked the biggest daily move, losing nearly 1% to $1.3105 on a dramatic deterioration in British data on manufacturing and services activity in July.
These purchasing managers’ figures were consistent with a broader 0.4-percent British economic contraction in the third quarter, pushing up the probability of a recession.
The euro weakened further on news that gunmen attacked a shopping mall in Munich, Germany. It was down 0.5% at $1.0967.
The dollar index was up 0.4% at 97.410.
The fallout from the Brexit decision is expected to dominate discussions at a weekend meeting of G20 finance ministers and central bank governors in Chengdu, China.
Recent solid readings on the US economy have revived bets the Federal Reserve may raise interest rates by year-end. That put pressure on gold prices and core government bond yields.
Benchmark 10-year US Treasury yields rose almost 1 basis point at 1.571%, while 10-year German bond yields were flat at -0.1%.
Spot gold prices fell $6.79 or 0.51%, to $1,323.91 an ounce.
The US central bank will hold a policy meeting next week where policymakers are widely expected to keep rates steady.
In the oil market, Brent crude settled down 51 cents or 1.1% at $45.49 a barrel. US crude settled down 56 cents or 1.25% at $44.19 a barrel. Reuters
Yashaswini Swamynathan in Bengaluru and Jamie McGeever in London contributed to this story.
Unlock a world of Benefits! From insightful newsletters to real-time stock tracking, breaking news and a personalized newsfeed – it's all here, just a click away! Login Now!
