October 22, 2020

U.S. Stocks Slightly Higher

Before trading began, the Commerce Department said that both personal income and spending rose 0.4 percent in April, in line with what economists expected. Higher food and gas prices accounted for most of the spending increase.

A cut in the amount withdrawn from paychecks for Social Security has given incomes a boost this year. But that extra take-home pay has been pinched by higher prices for gasoline.

But the government’s figures do not account for the dip in gas prices in May because they lag by a month. The Thomson Reuters/University of Michigan Consumer Sentiment index, a closely watched measure of consumer confidence, rose to 74.3 in May, above analysts’ estimates of 70. Concerns about higher gas prices and inflation had knocked the gauge down in March and April.

“That’s what a 25-cent drop in gas prices will do,” David Ader, bond strategist at CRT Capital Group, wrote in an email to clients. At the close of trading, the Dow Jones industrial average was up 38.82 points, or 0.31 percent. The Standard and Poor’s 550-stock index rose 5.41 points, or 0.41 percent. The Nasdaq composite index was up 13.94 points, or 0.5 percent.

Markets are closed Monday for Memorial Day.

European and Asian stock markets mostly rose Friday as a recovery in commodity shares helped investors look past weak economic data from the United States and worries about Greece’s debt troubles.

Sentiment has been dented in recent weeks by fears that the American economy, the world’s largest, is running out of steam. In a revised look at economic growth, the Commerce Department reported Thursday that the economy grew at a tepid annual rate of 1.8 percent in the first quarter, lower than many economists expected. Gasoline prices that reached $4 a gallon and sharp cutbacks in government spending hindered growth. The Labor Department also said more people applied for unemployment benefits last week.

Traders have also been shaken by worries that Greece may not get its next rescue loan installment, with a top European Union official reportedly warning that the International Monetary Fund may hold back on its part of the bailout. Those jitters hurt the euro and stocks on Thursday.

Then on Friday, Greece’s main opposition conservative party rejected a government plea for cross-party agreement on new austerity measures, despite strong pressure from the European Union and investor worries about a default. The party’s leader, Antonis Samaras, said he could not endorse a program that would “flatten the Greek economy and destroy Greek society.”

Mr. Samaras and other opposition party leaders met with Greece’s prime minister, George Papandreou, for more than three hours in a failed effort to reach a deal that would extend debt reduction measures to 2015, two years beyond the present government’s mandate.

Amid the uncertainty, the main stock index in Athens closed down 1.7 percent on the day.

The euro recovered strongly from a sell-off on Thursday, rising to $1.4263 from $1.4140 the day before.

European shares posted solid gains. Britain’s FTSE 100 was 1.1 percent higher; Germany’s DAX rose 0.7 percent and France’s CAC 40 was 1 percent higher.

Commodities stocks led the gains, with Rio Tinto and Antofagasta up 1.8 percent and 2.4 percent.

In Asia, most indexes rose, though Japan’s Nikkei 225 index drifted down to close 0.4 percent lower at 9,521.94.

Sony fell 3.2 percent, a day after reporting a 259.6 billion yen ($3.2 billion) loss for the fiscal year ended March 2011 and its third straight year of losses. Costs of online security breaches around the world and the March 11 earthquake in northeastern Japan battered the electronics and entertainment giant.

Hong Kong’s Hang Seng gained 1 percent to 23,118.07. South Korea’s Kospi finished 0.4 percent higher at 2,100.24. Australia’s S. P./ASX 200 added 0.5 percent to 4,684.

Mainland Chinese shares sank to their lowest level in nearly eight months as investors, succumbing to gloom over the outlook for the latter half of the year, unloaded shares.

The benchmark Shanghai Composite Index lost 1 percent to 2,709.95, its lowest close since Sept. 30. The Shenzhen Composite Index fell 2 percent to 1,101.11. Shares in coal companies advanced while agricultural-related and textile shares fell sharply.

Benchmark oil for July delivery was up 25 cents to $100.48 per barrel on the New York Mercantile Exchange.

The dollar fell to 81.09 yen from 81.30 yen.

Article source: http://feeds.nytimes.com/click.phdo?i=634bbb0ab16d754e00e42dad817f8270

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