NEW YORK: Investors returned to stock markets around the world on Thursday, inspired by bargain hunting and strong corporate earnings reports, while anticipation of a vote on US tax policy limited the dollar's gains.
After five consecutive daily losses on the MSCI index of world stocks bounced back helped by Wall Street's gains, which were boosted by results from Cisco Systems and Wal-Mart Stores.
The dollar index rose 0.04 percent, with the euro down 0.18 percent to $1.177.
"Some of the selling pressure on the dollar seems to have abated a little bit. We are seeing a slightly less negative mood in global financial markets," said Omer Esiner, chief market analyst at Commonwealth Foreign Exchange in Washington.
"One of the biggest headwinds for the dollar is the uncertainty surrounding tax reform," said Esiner.
Investors across all asset classes were keeping an eye on Washington as lawmakers in the Republican-controlled House of Representatives prepared to vote on a tax bill.
But hopes for a revised US tax program have met with resistance in the Senate as some Republican lawmakers have criticized its tax bill, which is different from the House version.
Bucky Hellwig, senior vice president at BB&T Wealth Management in Birmingham, Alabama, expects tax overhaul uncertainty to affect the market "every day until there's some resolution.
"It's still a can of worms. We see changes from day to day," he said. "But investors are somewhat optimistic. I think the indication is that they're doing everything they can to get something to Trump before the end of the year, and that's a positive for stocks."
The Dow Jones Industrial Average rose 187.65 points, or 0.81 percent, to 23,458.93, the S&P 500 gained 19.24 points, or 0.75 percent, to 2,583.86 and the Nasdaq Composite added 80.04 points, or 1.19 percent, to 6,786.25.
Oil prices dipped for the fifth day in a row as rising US production and inventories threatened to undermine a recent rally inspired by OPEC's curbs on output.
US crude rose 0.33 percent to $55.51 per barrel and Brent was last at $61.98, up 0.18 percent on the day.
US Treasury two-year yields hit a nine-year high as risk appetite recovered globally and a batch of neutral to solid economic reports put the Federal Reserve on track to raise interest rates in 2018.
US two-year yields climbed to a nine-year peak of 1.716 percent, from 1.691 percent on Wednesday and the gap between 2-year note and US 10-year note yields contracted to 63.2 basis points, its tightest since 2007.
Benchmark 10-year notes last fell 4/32 in price to yield 2.3487 percent, from 2.335 percent late on Wednesday.
The liveliest moves in Asia came in Japan, where the Nikkei turned around early losses to surge 1.5 percent as investors returned after a six-day losing streak.
MSCI's broadest index of Asia-Pacific shares outside Japan closed 0.89 percent higher, while Japan's Nikkei rose 1.47 percent.
Comments
Comments are closed for this article.