U.S. Stocks, Dollar Steady After Steep Selloff
May 18 2017 - 11:20AM
Dow Jones News
By Akane Otani and Riva Gold
-- S&P 500 gains 0.4%
-- Stoxx Europe 600 sheds 1%, Nikkei off 1.3%
-- WSJ Dollar Index rises 0.2%
U.S. stock indexes rebounded Thursday from their worst selloff
of the year as investors lifted shares of financial and technology
companies.
The Dow Jones Industrial Average rose 58 points, or 0.3%, to
20665, led by gains in Apple and Goldman Sachs Group. The S&P
500 added 0.4%, and the Nasdaq Composite rose 0.7%.
Turmoil in Washington has put the Trump administration on the
defensive and renewed concerns among investors that the White House
may struggle to push through proposals on tax cuts, deregulation
and infrastructure spending. Bets on such policy changes had helped
stocks and the U.S. dollar climb after Election Day while sending
government bonds lower.
While Wednesday's declines interrupted a period of unusual calm
in the markets, many say longer term, jitters in Washington are
unlikely to derail the stock rally. A buoyant global economy and
solid corporate earnings should help major indexes keep climbing,
investors and analysts say.
Data Thursday showed the number of Americans applying for
first-time unemployment benefits fell last week for the third
consecutive time in a fresh sign of steady job creation.
"I still continue to go back to the economy when I'm talking to
clients. As long as the U.S. economy remains in a good foundation
... that creates a supportive environment for equities," said
Shannon Saccocia, head of asset allocation & portfolio strategy
at Boston Private Wealth.
U.S. government bonds edged lower Thursday, with the yield on
the 10-year U.S. Treasury note rising to 2.222%, according to
Tradeweb, from 2.216% Wednesday. Yields rise as bond prices fall.
On Wednesday, Treasury yields posted their biggest one-day decline
since the week of the U.K. referendum in June.
The WSJ Dollar Index, which measures the dollar against a basket
of 16 currencies, inched up 0.3% after logging its worst session
since March.
Shares of financial and technology companies, among the worst
hit in Wednesday's stock selloff, also rebounded Thursday.
Financial stocks in the S&P 500 rose 0.8%, lifted by gains in
Morgan Stanley and Goldman Sachs, while technology stocks rose 0.6%
as Apple shares climbed 1.9%.
Some investors caution that further signs of dissension in
Washington could put pressure on stocks, especially if they suggest
a delay in tax cuts, which many hope will boost corporate
earnings.
"Two weeks ago, we were talking about policy, and now we're
talking about all of the political firestorm swirling around the
White House," said Brett Wander, CIO for fixed income at Charles
Schwab Investment Management.
Elsewhere, the Stoxx Europe 600 fell 0.4% amid declines in
banks, miners and auto companies.
Earlier, Japan's Nikkei Stock Average fell 1.3% as a global
flight to haven assets boosted the value of the yen, weighing on
the country's exporters, particularly in the auto sector. Declines
in Japanese shares came despite economic data that showed
first-quarter gross domestic product expanded 2.2% from a year
earlier.
--Kenan Machado contributed to this article.
Write to Akane Otani at akane.otani@wsj.com and Riva Gold at
riva.gold@wsj.com
(END) Dow Jones Newswires
May 18, 2017 11:05 ET (15:05 GMT)
Copyright (c) 2017 Dow Jones & Company, Inc.
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