Breaking News
Get Actionable Insights with InvestingPro+: Start 7 Day FREE Trial Register here
Investing Pro 0
Ad-Free Version. Upgrade your Investing.com experience. Save up to 40% More details

Stocks end higher on strong tech amid mixed U.S. earnings, weak economic reports

Economy Feb 03, 2022 09:26
Saved. See Saved Items.
This article has already been saved in your Saved Items
 
2/2 © Reuters. FILE PHOTO: A man walks under the illuminated word "Borse" (exchange) as he passes the headquarters of Swiss stock exchange operator SIX Group in Zurich, Switzerland November 20, 2017. REUTERS/Arnd Wiegmann/File Photo 2/2

(This Feb 2 story adds dropped word "tech" in headline)

By Katanga Johnson

WASHINGTON (Reuters) - Global stocks rallied on Wednesday to close higher as strong earnings from U.S. technology companies and OPEC+ plans for moderate oil output helped to counter jitters over weak economic reports.

Investors also shrugged off the pace of central banks' interest rate hikes.

The STOXX index of 600 European companies rose 0.45%, up for a third straight session, to recoup nearly half its losses during January's global rout in shares.

MSCI's gauge of stocks across the globe gained 0.80%.

Crude oil eyed seven-year highs and the dollar eased. On Wall Street, the Dow Jones Industrial Average rose 0.63% and the S&P 500 gained 0.94%.

The Nasdaq Composite added 0.5%. Last month, the tech-heavy index fell as much as 19% from its all-time high in November as investors dumped highly valued growth stocks on prospects of faster-than-expected rate hikes.

"The temptation to step in and buy into the sell-off in high growth stocks should be avoided," said Andrew Slimmon, a managing director at Morgan Stanley (NYSE:MS) Investment Management.

"Once the fever breaks, it's done for quite a while."

An unexpected decline in private payrolls helped stabilize U.S. Treasury yields as investors weighed its potential impact on Friday's broader jobs report.

Record high euro zone inflation of 5.1% in January defied expectations of a drop to 4.4%, sending German government bond yields to multi-year highs and the euro surging.

The European Central Bank has insisted that price growth is temporary and benign, but markets will be looking for any change in tone https://www.reuters.com/markets/europe/inflation-stations-five-questions-ecb-2022-01-31 when it meets on Thursday.

"The unexpectedly high inflation rate is a slap in the face for the ECB. It will have to finally recognize the massively increased inflation risks and take its foot off the pedal of monetary policy," said Joerg Kramer, chief economist at Commerzbank (DE:CBKG).

Several Asia markets, including China, were closed for the Lunar New Year holidays.

Investor sentiment has been swinging between concerns over Federal Reserve and other central banks' tightening and confidence in the economic recovery. Wednesday's earnings outlook is helping to ease the uncertainty, but stubborn inflation and geopolitical risks remain a threat.

"The tug of war between higher interest rates and corporate earnings continues," said Jake Manoukian, who leads U.S. investment strategy at J.P. Morgan Private Bank.

Markets are pricing in a string of rate hikes from the Fed and the Bank of England, analysts said.

The BoE meets on Thursday, and markets expect the central bank to increase UK rates.

Fed officials sought to play down the chance of a half-point rate rise in March. Though he said he saw three successive hikes starting in March, St. Louis Fed President James Bullard pushed back at the idea of an initial half-percentage point move.

Friday's U.S. non-farm payroll figures will also be closely watched.

OIL EYES OPEC+

Oil prices jumped on Wednesday, closing in on a seven-year high, after OPEC+ stuck to its planned output increase despite pressure from top consumers to raise production more quickly.

An OPEC+ source told Reuters the producer group agreed to increase oil production by 400,000 bpd from March after a short meeting.

U.S. crude recently fell 0.22% to $88.01 per barrel and Brent was at $89.34, up 0.2% on the day. [O/R]

The bond market sell-off since the start of the year stalled on Tuesday, with benchmark U.S. 10-year Treasury yields hovering near their lowest levels in a week. [GVD/EUR]

Benchmark U.S. 10-year Treasury yields fell one basis point to 1.768%.

Treasury yields, which move inversely to prices, in January rose the fastest by some measures since 2009 as investors started to price in the possibility that the Fed could raise interest rates as many as five times this year.

Spot gold added 0.3% to $1,806.81 an ounce despite a downbeat jobs report, underpinning demand for the safe-haven metal amid simmering tensions between Russia and the West over Ukraine. [GOL/]

Risk-sensitive currencies such as the Australian dollar, the euro, and the British pound gained. The dollar index fell 0.29%, with the euro up 0.31% to $1.1304.

The rouble strengthened to a near two-week high past 76 against the dollar after the Kremlin said Russia had plans in place to hedge against possible U.S. sanctions should Russia invade neighboring Ukraine.

Stocks end higher on strong tech amid mixed U.S. earnings, weak economic reports
 

Related Articles

Dollar trades solidly in calm before CPI storm
Dollar trades solidly in calm before CPI storm By Reuters - Aug 10, 2022

By Tom Westbrook SINGAPORE (Reuters) - The dollar traded firmly on Wednesday in anticipation of U.S. inflation data, which even if it comes in softer-than-expected is still likely...

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind: 

  • Enrich the conversation
  • Stay focused and on track. Only post material that’s relevant to the topic being discussed.
  • Be respectful. Even negative opinions can be framed positively and diplomatically.
  •  Use standard writing style. Include punctuation and upper and lower cases.
  • NOTE: Spam and/or promotional messages and links within a comment will be removed
  • Avoid profanity, slander or personal attacks directed at an author or another user.
  • Don’t Monopolize the Conversation. We appreciate passion and conviction, but we also believe strongly in giving everyone a chance to air their thoughts. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

Write your thoughts here
 
Are you sure you want to delete this chart?
 
Post
Post also to:
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
 
Are you sure you want to delete this chart?
 
Post
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Continue with Google
or
Sign up with Email