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Abu Dhabi, UAESaturday 22 September 2018

 Dow Jones notches up another record high

Bulls run on Wall Street at the start of a busy week that includes the July jobs report and earnings from Apple

The Dow Industrial Average at the New York Stock Exchange.   Bryan R Smith / AFP
The Dow Industrial Average at the New York Stock Exchange. Bryan R Smith / AFP

The Dow struck a record high on Monday as the bulls ran on Wall Street at the start of a busy week that includes the July jobs report and earnings from Apple.

US markets have been bouyant as of the nearly 300 companies in the S&P 500 that have reported results thus far, more than three-fourths have bested earnings expectations, according to Wells Fargo Advisors.

Building on a record close on Friday, the Dowset a new all-time high of 21,916.67 points in morning trading on Monday.

"The Dow Jones has notched up another record-high as the bullish sentiment surrounding the equity benchmark knows no bounds," said the market analyst David Madden at CMC Markets.

"The momentum is clearly with the bulls, and at this stage it becomes a self-fulling prophecy -- the more new record highs it creates, the more it entices fresh buyers," he said.

Meanwhile, London's FTSE 100 stayed in positive territory on Monday thanks to share-price gains for the resources sector, as while official data showed that China's manufacturing activity had faltered in June, it was still expanding.

HSBC was also a big riser, gaining 1.8 per cent to £7.57 per share after the British banking giant announced a share buyback plan alongside a rise in first-half profits.

Meanwhile, Paris and Frankfurt pulled back.

Mr Madden said that "dealers are worried the European Central Bank could discuss the possibility of reducing the size of the stimulus package, in light of the good unemployment and core CPI data from the euro zone today."

Euro-zone unemployment hit an eight-year low in June, while euro-zone inflation steadied at 1.3 per cent in July.

Meanwhile, oil prices rallied to two-month highs, with New York futures inching past US$50 a barrel and the benchmark Brent contract reaching almost $53, before profit-taking set it.

Analysts said crude had been pushed higher by a mix of lower Saudi exports, a deep fall to US crude stockpiles, a weaker dollar and unrest in Opec member Venezuela.

"A whole series of supportive news drove Brent up by nearly 10 percent within a week to nearly $53 per barrel" on Monday, said the Commerzbank analyst Carsten Fritsch.

Support for oil was felt across the resources sector, with mining and utility companies enjoying solid share price gains Monday, also on back of well-received earnings updates.

In Asian stocks trading, Tokyo closed lower as the yen hardened against the dollar.

The yen's rise came as the dollar was dragged down by increasing US policy uncertainty after another failed attempt at healthcare reform.

The currency also took a hit from US growth data Friday which cast further doubt on any early interest rate increase from the Federal Reserve.

Renewed tensions following North Korea's latest launch of an intercontinental ballistic missile has also aided the yen, considered a safe bet in times of turmoil.

"There remains real appetite to sell the dollar... as it's becoming evident to all the greenback has problems, and the can of worms is barely open," said Stephen Innes, who heads Asia-Pacific trading at Oanda.

* Bloomberg

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