Stocks Climb on Optimism About Global Economy
January 24 2020 - 10:38AM
Dow Jones News
By Avantika Chilkoti
Major U.S. stock indexes perked up Friday on signs of strength
in the technology sector and upbeat economic data from Europe.
The Dow Jones Industrial Average gained 0.3% in morning trading,
while the S&P 500 rose less than 0.1% and the Nasdaq Composite
added 0.3%.
Shares of Intel, a Dow constituent, surged 8.2%. The giant chip
maker late Thursday reported fourth-quarter earnings that beat
expectations following an upswing in personal-computer shipments
and robust demand for chips to power data centers.
Rival chip maker Broadcom gained 2.7% after the company said it
had secured multiyear supply agreements to provide wireless
components for Apple products.
Overseas, the pan-continental Stoxx Europe 600 index climbed
1.1% as investor sentiment was buoyed by data that signaled a halt
to the slowdown in the German manufacturing sector.
Preliminary data on purchasing managers' indexes, closely
watched measures of business activity, suggested that the
manufacturing sector in the eurozone -- and Germany, in particular
-- fared better than the market had expected in January. Factories
in the region saw export orders begin to stabilize after a long and
deep decline, and while the manufacturing sector continued to
contract, it was at a slower pace than previous months.
"The markets are reacting to the signs of bottoming in German
manufacturing," said Mike Bell, global market strategist at J.P.
Morgan Asset Management. "It's pretty key because the big question
on everyone's mind has been: is there recession risk? And the most
obvious risk there was a downturn in European manufacturing."
Within European equities, shares in Ericsson dropped 6.5% after
higher costs weighed on the telecommunications equipment company's
latest earnings, and it said expenses will continue to rise this
year.
Meanwhile, Carrefour rose 6.2% after the French retailer boosted
its guidance for 2019 earnings, exceeding investors'
expectations.
U.K. stocks rose, with the FTSE 100 index climbing 1.2% after
the latest purchasing managers index data was better than analysts
expected.
The readings are "the surest sign yet that the economy has
turned a corner since the election," and would likely mean the Bank
of England holds off cutting rates later this month, analysts at
Capital Economics said in a note.
In Asia, Japan's Nikkei 225 benchmark closed up 0.1% and Hong
Kong's Hang Seng finished the day up almost 0.2%. Chinese and
Korean markets were closed for public holidays.
Write to Avantika Chilkoti at Avantika.Chilkoti@wsj.com
(END) Dow Jones Newswires
January 24, 2020 10:23 ET (15:23 GMT)
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