U.S. Stocks Open Higher After Selloff
May 24 2019 - 10:07AM
Dow Jones News
By Paul J. Davies
U.S. stocks opened higher Friday, a day after investors pulled
money out of riskier companies such as technology firms in favor of
safe-haven assets such as government bonds.
The recovery Friday illustrated that even as investors have
grown more wary about the effects of the U.S.-China trade standoff
on the U.S. and other economies, they remain cautiously optimistic
about the future of corporate profits.
The Dow Jones Industrial Average rose 142 points, or 0.5%, to
25633 shortly after the opening bell. The S&P 500 climbed 0.6%
and the Nasdaq Composite added 0.7%.
Elsewhere, the Stoxx Europe 600 rose about 0.7%. Hong Kong's
Hang Seng was up 0.3% and China's Shanghai A-shares were flat,
while the Nikkei 225 slipped 0.2%.
In currency markets, the dollar softened, with the WSJ Dollar
Index down 0.11%, while the British pound rose after a week of
declines as U.K. Prime Minister Theresa May announced Friday she
would resign in two weeks to allow a new leader to try to break
log-jammed efforts to agree a way to leave the European Union.
The problem for investors is in working out how much economic
damage the U.S.-China trade row might inflict and how politicians
and central banks will react. Most major central banks apart from
the U.K. appear more likely to ease monetary policy than raise
interest rates in the months ahead, which should support
markets.
The U.S. economy is among the least dependent on international
trade in the world, according to Mark Haefele, chief investment
officer in UBS's Global Wealth Management division, and the White
House is confident that any economic damage to the economy will be
limited.
"When it serves his interest, President Trump takes tariffs off
as quickly as he puts them on, so things can change quickly," Mr.
Haefele said." But we don't see the U.S. or China hurrying to reach
a deal, and the risk of miscalculation is growing."
Worries about the economic impact hit oil prices hard Thursday,
with Brent crude prices dropping more than 4.5% for their biggest
one-day fall since Christmas eve 2018. Brent partly recovered
Friday morning, rising nearly 1.5% to $68.83.
Government bond prices slipped and yields rose slightly Friday,
rowing back on the trend of investors' growing preference for
safety that has pushed yields generally lower all year. U.S.
10-year Treasury yields were back up to 2.322% from 2.296% on
Thursday, which was their lowest level since early December
2017.
Write to Paul J. Davies at paul.davies@wsj.com
(END) Dow Jones Newswires
May 24, 2019 09:52 ET (13:52 GMT)
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