October 2, 2022

Wall Street Pauses After Big Gains

Global stocks rallied further Wednesday as a raft of positive earnings reports from American businesses and signs of progress over raising the United States debt ceiling helped offset debt concerns afflicting Europe. But Wall Street opened quietly, absorbing Tuesday’s broad advance.

Investor sentiment has been buoyed by better-than-expected earnings from the likes of Coca-Cola, I.B.M.
and Apple, and further earnings from eBay, Intel and American Express were expected to be of interest later on Wednesday.

In addition, there were signs Tuesday that progress was being made in raising the $14.3 trillion United States debt limit to avoid a default, after President Barack Obama backed a bipartisan plan proposed by six senators.

“News that there was progress being made in raising the U.S. debt ceiling, along with some bumper earnings news from tech stocks like Apple, has helped cheer investor sentiment,” said Ben Critchley, a sales trader at IG Index.

In morning trading, the Dow Jones industrial average fell 9.30 points, or 0.07 percent, to 12,578.12. The Standard Poor’s 500-stock index added 0.97 points, or 0.07 percent, to 1,327.70, and the Nasdaq composite index lost 3.58 points, or 0.13 percent, to 2,822.94.

In Europe, the FTSE 100 index of leading British shares was up 0.94 percent at 5,844, while Germany’s DAX rose 0.26 percent to 7,211. The CAC 40 in France was 1.57 percent higher at 3,752.

Wall Street was also poised for further gains at the open; Dow futures were up 50 points.

As investors monitor developments over the debt ceiling, they will also keep a close watch on any developments in Europe’s debt crisis, a day ahead of a meeting of European Union leaders in Brussels.

Hopes of a dramatic move were dashed Tuesday after Chancellor Angela Merkel of Germany said the summit wouldn’t yield a quick and comprehensive solution. She said there won’t be anything as “spectacular” as a restructuring of Greek debt.

The International Monetary Fund, itself a big contributor to the euro zone’s three bailouts, also ratcheted up the pressure on the Continent to get a grip on its debt problems.

“The resilient recovery of the euro area economy stands in marked contrast with the authorities’ struggle to come to grips with the sovereign crisis affecting some member states and casting a shadow over the economic and monetary union project,” the fund said in a report on Tuesday.

Despite ongoing concerns over Europe’s debts and its handling of the crisis, the euro is faring fairly well. By late morning, it was trading 0.4 percent higher at $1.4209.

“The consensus opinion still remains that the deterioration in investor confidence in euro zone debt will eventually be contained by policy action,” said Lee Hardman, currency economist at The Bank of Tokyo-Mitsubishi UFJ.

Earlier in Asia, Japan’s Nikkei 225 stock average rose 1.2 percent to close at 10,005.90 and South Korea’s Kospi was up 1.2 percent to end at 2,154.95. Hong Kong’s Hang Seng climbed 0.4 percent to close at 22,003.69.

Mainland Chinese shares spent most of the day fighting to get into positive territory. The Shanghai Composite Index ended the day 0.1 percent lower at 2,794.20.

Oil prices rose above $98 after a report showed crude supplies in the United States had dropped more than expected, a sign demand may be improving. Benchmark oil for August delivery was up $1.19 to $98.69 a barrel in electronic trading on the New York Mercantile Exchange.

Article source: http://feeds.nytimes.com/click.phdo?i=b7c22d8f14c8f3b7987c8e6b68ff0e0b

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