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Wall Street strikes fresh records

The S&P 500 and Dow both powered to new intra-day highs as the opening bell rang after closing at record levels on Monday.

October 26, 2021 / 07:50 PM IST
Source: Reuters

Source: Reuters

Wall Street opened in record territory on Tuesday as a host of tech firms were set to announce their results.

The S&P 500 and Dow both powered to new intra-day highs as the opening bell rang after closing at record levels on Monday.

"Just because some technical indicators might suggest the stock market is overbought on a short-term basis and ripe for a pullback doesn't mean market participants will necessarily comply," Briefing.com analyst Patrick J. O'Hare said.

Progress in Washington on US President Joe Biden's big-spending economic plans also provided support, traders said.

"The stock market seems more than content to wait, placated by the positive price momentum that has yet to break, (and) some residual relief that the corporate tax rate isn't going to be increased to pay for the Democrats' social spending package," O'Hare said.

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Google, Microsoft and Twitter are due to release their results after trading in New York closes.

Equity markets slumped in September as investors took fright at supply chain snarls, soaring inflation, and the coming winding down of central bank support.

But they have rebounded as companies report solid earnings and have generally been able to cope with the supply chain problems and price hikes.

On Monday, tech firms were lifted as Facebook posted a $9 billion (7.8 billion euros) profit in the third quarter and electric car maker Tesla's valuation hit the trillion-dollar mark

"Strong corporate results are helping with sentiment," noted AJ Bell investment director Russ Mould.

Swiss giant UBS was the latest bank to post bumper profits, buoyed by its wealth management division and fees from investment banking.

The gains on Wall Street help pull other markets higher.

Tokyo's main stocks index led the gains on Tuesday, piling on 1.8 percent by the close, helped also by polls predicting that Japan's ruling Liberal Democratic Party will probably win a majority in the coming general election.

But Hong Kong and Shanghai dropped following news that developer Modern Land had missed a bond payment in the latest sign of stress in China's property sector.

Jeffrey Halley, analyst at trading group Oanda, meanwhile raised concerns about the possible impact of the latest Delta outbreak in China.

Officials put the city of Lanzhou, with a population of four million, under lockdown on Tuesday, with residents told not to leave home except in emergencies.

A risk of lockdowns elsewhere "would complicate an already nightmarish scenario for global supply chains under stress", Halley added.

In Europe, the ECB holds its latest policy meeting on Thursday, with traders looking for an idea about its plans for monetary policy in light of surging global inflation.

The gathering comes as financial chiefs around the world begin to remove the ultra-loose measures put in place at the start of the pandemic, with the Bank of England tipped to lift interest rates this year, following moves by South Korea and New Zealand.

The euro hit a 20-month low versus the British pound on Tuesday on expectations that the Bank of England will raise rates before the European Central Bank.

The Federal Reserve has said it will begin winding down its huge stimulus by the end of the year, while there is a growing expectation that the US central bank will raise borrowing costs in mid-2022.

- Key figures around 1330 GMT -

London - FTSE 100: UP 0.7 percent at 7,270.85 points

Frankfurt - DAX: UP 1.0 percent at 15,761.64

Paris - CAC 40: UP 0.7 percent at 6,761.75

EURO STOXX 50: UP 0.9 percent at 4,255.32

New York - Dow: UP 0.2 percent at 35,817.08

Tokyo - Nikkei 225: UP 1.8 percent at 29,106.01 (close)

Hong Kong - Hang Seng Index: DOWN 0.4 percent at 26,038.27 (close)

Shanghai - Composite: DOWN 0.3 percent at 3,597.64 (close)

Euro/dollar: UP at $1.1616 from $1.1614

Euro/pound: DOWN at 84.20 pence from 84.33 pence

Pound/dollar: UP at $1.3798 from $1.3767

Dollar/yen: UP at 114.10 from 113.71 yen at 2050 GMT

Brent North Sea crude: DOWN 0.1 percent at $85.88 per barrel

West Texas Intermediate: FLAT at $83.74 per barrel
AFP

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