FILE PHOTO – A stockbroker works at the Frankfurt Stock Exchange as markets react to the coronavirus disease (COVID-19), at the stock exchange in Frankfurt, Germany March 27, 2020. REUTERS/Kai Pfaffenbach
WASHINGTON/LONDON, April 27 – Major US stock indexes closed higher after choppy trading on Wednesday, boosted by strong gains from Microsoft and Visa as commodities stocks propelled European shares to their first gain in four sessions .
The euro fell to its weakest level since 2017 after Russia halted gas supplies to Bulgaria and Poland and investors grew more concerned about the region’s economy.
The dollar continued to soar and was on course for its biggest monthly gain since January 2015 amid growing expectations that the US Federal Reserve would hike interest rates aggressively in the coming months and that the US economy would outperform the eurozone.
The Dow Jones Industrial Average (.DJI) was up 0.19% to 33,301.93 points, while the S&P 500 (.SPX) was up 0.21% to 4,183.92.
The Nasdaq Composite (.IXIC) fell 0.01% to 12,488.93.
Microsoft Corp (MSFT.O) was up 4.8%% and Visa Inc (VN) was up 6.5%% on strong earnings, which helped boost the S&P 500.
Some of Wall Street’s biggest names have reported results this week, with investors looking for a counterbalance to the barrage of negative news that has hit stocks. Continue reading
Google parent Alphabet Inc (GOOGL.O) fell 3.6% as declining YouTube ad sales pushed quarterly earnings below expectations. Boeing Co (BA.N) fell 7.5% after disclosing $1.5 billion in abnormal costs from halting 777X production. Continue reading
The pan-European STOXX 600 (.STOXX) was up 0.7% after hitting six-week lows on the open, with both mining companies (.SXPP) and oil stocks (.SXEP) gaining.
German stocks (.GDAXI), which underperformed during the session, recovered at the close.
European corporate earnings were mixed. Credit Suisse reported another quarterly loss and Deutsche Bank warned that the Russia-Ukraine conflict could impact full-year results. Continue reading
Russia cut off natural gas supplies to Bulgaria and Poland for refusing their demand to pay in rubles, targeting European economies squarely. This prompted investors to sell euros and buy US dollars. Continue reading
The MSCI benchmark for global equity markets (.MIWD00000PUS) fell 0.17%. Emerging market equities (.MSCIEF) fell 0.54%.
US Treasury yields rose as investors expected more clarity on the “tightening” policy the Fed intends to adopt next week to fight inflation by curbing economic growth.
The euro fell as low as $1.0512, its weakest against the dollar since May 2017. Analysts cited the war in Ukraine and growing concerns that the bloc’s economy will fall into recession this year.
“The euro’s apparent inability to recover on hawkish comments from European Central Bank members means it remains vulnerable to an external environment negatively impacted by an increasingly worrying situation in Ukraine and broader USD strength ” wrote ING FX strategists in a note to clients.
The dollar index, which measures the greenback against a basket of peers, hit a five-year high.
“The US dollar is benefiting from the prospect of a continued flight to safe liquidity,” said Jeremy Stretch, head of G10 FX strategy at CIBC.
euros against US dollars
CHINESE REBOUND
Asia saw more selling, with MSCI’s broadest index of Asia-Pacific equities outside Japan (.MIAPJ0000PUS) slipping 0.82% after hitting its lowest level since mid-March. Tokyo’s Nikkei (.N225) fell 1.17%.
Australian equities (.AXJO) lost 0.78% as inflation hit a 20-year high and rate hikes loomed. Continue reading
Bucking the trend, battered Chinese stocks (.CSI300) rose nearly 3% as data showed faster earnings growth at industrial companies in March than a year earlier. Continue reading
In the previous session, Chinese stocks fell to their lowest level in two years on fears that prolonged COVID lockdowns would hurt economic activity and disrupt global supply chains. Continue reading
Oil prices edged higher on ongoing global supply concerns, with Brent crude futures up 33 cents to $105.32 a barrel and US crude up 32 cents to $102.02 a barrel.
Spot gold prices hit a more than two-month low, last falling 1.05% at 4:34pm EST (2034 GMT), amid pressure from the dollar’s rally. US Gold Futures GCv1 was down 0.8% to $1,888.70 an ounce.
Additional reporting by Kanupriya Kapoor and Joice Alves; Edited by John Stonestreet, Mark Heinrich, David Gregorio, Nick Zieminski and Jonathan Oatis