Oil price heads to $70 as global market peaks

October 28, 2017 Wisdom Nwedene Breaking News, Britain, Business, Hot News, National 0

Oil price rose and Nasdaq Composite had its best day in nearly a year on Saturday , boosted by strong corporate earnings, while the euro posted its worst week of 2017 after the European Central Bank decided to prolong its bond buying to keep interest rates low.

Oil prices jumped on support among the world’s top producers for extending a deal to cut output and as the dollar retreated from three-month peaks.

U.S. crude rose 2.6 per cent to 54.01 dollars per barrel and Brent was last at 60.44 dollars, up 1.92 per cent on the day.

The Nasdaq Composite added 144.49 points, or 2.2 percent, to 6,701.26, the S&P 500 gained 20.67 points, or 0.81 percent, to 2,581.07, and the Dow Jones Industrial Average rose 33.33 points, or 0.14 per cent, to 23,434.19.

Gains were led by robust corporate results and upbeat third-quarter U.S. GDP data. The U.S. economy grew at a 3.0 per cent annual rate from July to September, showing resilience even as recent storms hurt consumer spending.

Google-parent Alphabet gain 4.3 per cent and Microsoft advance 6.4 per cent , which drove up the S&P technology index. The index notched its best day since March 1, 2016 and is up nearly 35 per cent on the year versus the 15-per cent gain in the S&P 500.

Amazon, up 13.2 per cent, was responsible for the biggest boost to the S&P 500 after reporting a quarterly sales surge. Its gains helped lift the consumer discretionary sector 1.60 per cent to its best daily performance since Dec. 7.

“Anyone who is drawing parallels to the tech bubble of 1999 has to at least consider that this rally in those large names is really fueled in large part by earnings, not just hope,” said Jack Ablin, chief investment officer at BMO Private Bank in Chicago.

Chevron weighed on the Dow, with its shares dropping 4.1 percent after missed profit estimates.

A report about President Donald Trump favoring Federal Reserve Governor Jerome Powell as the head of the U.S. central bank also provided support for stocks. Powell is seen likely to maintain the Fed’s current monetary policy.

The White House said later on Friday that the president will announce his pick for chairman next week.

MSCI’s gauge of stocks across the globe gained 0.41 percent.

European shares reached a five-month high overall on Friday, also buoyed by strong earnings. The pan-European FTSEurofirst 300 index rose 0.54 percent.

Spain’s IBEX was the worst-performing major index on the day, losing 1.5 percent after the Catalan parliament declared its independence from Spain on Friday following a secret ballot.

Following the declaration, Spain sacked Catalonia’s regional government, dissolved the Catalan parliament and called a snap election to draw a line under Spain’s worst political crisis in 40 years.

MSCI’s broadest index of Asia-Pacific shares outside Japan closed 0.18 percent higher, while Japan’s Nikkei rose 1.24 percent.

The euro marked its biggest weekly loss of the year following the Catalan independence vote and the ECB’s decision on Thursday to extend its bond purchases into September 2018 while reducing its monthly purchases by half to 30 billion euros starting in January.

“The dovish surprise from the ECB was its openness to extend the duration of its bond purchase program,” said Omer Esiner, chief market strategist at Commonwealth Foreign Exchange in Washington.

The euro dropped 0.38 percent to $1.1606, while the dollar index rose 0.22 per cent.

The stronger-than-expected U.S. third-quarter GDP data helped bolster the dollar.

U.S. Treasury note yields fell on the Catalonia developments and the speculation surrounding Powell at the Fed.

Benchmark 10-year notes last rose 11/32 in price to yield 2.4137 per cent, from 2.454 per cent late on Thursday.

The 30-year bond last rose 22/32 in price to yield 2.9251 percent, from 2.961 per cent late on Thursday.

Gold prices edged higher on Friday, on the Spanish developments leading investors to seek safety from political upheaval. Spot gold added 0.5 per cent to 1,273.06 dollars man ounce.
(Reuters/ NAN)

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