U.S. stocks hit one-month high on bank results; pound up on UK PM confidence vote
(New throughout, updates prices, market activity and comments
to U.S. markets close)
* U.S. stocks hit one-month highs
* Earnings from Bank of American and Goldman Sachs upbeat
* Sterling up against dollar after May wins confidence vote
* U.S. crude ends up 0.4 percent
By Caroline Valetkevitch
NEW YORK, Jan 16 (Reuters) - World stock markets rose on
Wednesday, with Wall Street's major indexes hitting one-month
highs after strong earnings from Bank of America Corp and
Goldman Sachs, while the pound rose after British Prime Minister
Theresa May's government won a confidence vote in parliament.
May can now try to build consensus on an agreement on
Britain's departure from the European Union. The
confidence vote followed the parliamentary defeat of May's
Brexit deal late Tuesday.
Hopes for a softer Brexit, perhaps incorporating the Labour
Party's idea of a customs union, gave some support to the pound.
"Sterling has jumped on the back of this because now we are
looking at the possibilities of other parties coming to Theresa
May and work with her on the issue of Brexit. The future path
will be very much dependent on the promises she makes with cross
parties," Naeem Aslam, chief market analyst at Think Markets UK
Ltd in London, wrote in a note following the vote.
Sterling was last trading at $1.2877, up 0.15 percent
on the day.
Stocks held their gains following the vote. MSCI's gauge of
stocks across the globe gained 0.18 percent.
On Wall Street, results from Bank of America and
Goldman Sachs eased worries about the earnings outlook
and helped to support stocks. Bank of America shares were up 7.2
percent while Goldman's stock was up 9.5 percent.
"It's still way early, but so far the tone has been good,"
said Paul Nolte, portfolio manager at Kingsview Asset Management
"The fact that the banks are a little more sensitive
certainly to interest rates and the yield curve and business
activity, it gives a decent read on the economy."
The Dow Jones Industrial Average rose 141.57 points,
or 0.59 percent, to 24,207.16, the S&P 500 gained 5.8
points, or 0.22 percent, to 2,616.1 and the Nasdaq Composite
added 10.86 points, or 0.15 percent, to 7,034.69.
Investors also digested a Wall Street Journal report that
federal prosecutors are investigating Huawei Technologies, the
world's largest telecommunications equipment maker, for
allegedly stealing trade secrets from U.S. businesses and could
soon issue an indictment.
The pan-European STOXX 600 index rose 0.54 percent.
The dollar rose against the euro as the euro zone single
currency was pushed lower by worries about the zone's economy,
with the euro down 0.18 percent to $1.1393.
Data this week showed Germany barely escaped a recession in
the second half of 2018. On Tuesday, European Central Bank chief
Mario Draghi warned the euro zone economy was weaker than
U.S. Treasury yields climbed as the confidence vote and
stock market gains reduced safety bids on the bond market.
Benchmark 10-year notes last fell 6/32 in price
to yield 2.7272 percent, from 2.708 percent late on Tuesday.
Oil prices also gained, boosted by the U.S. equity market
rally and a supply cut agreement by OPEC+.
Brent crude futures rose 68 cents to settle at
$61.32 a barrel. U.S. West Texas Intermediate (WTI) crude
futures rose 20 cents to settle at $52.31 a barrel.
For Reuters Live Markets blog on European and UK stock
markets, please click on:
(Additional reporting by Tom Wilson in London
Editing by James Dalgleish and David Gregorio)
First Published: 2019-01-16 03:30:22
Updated 2019-01-16 23:33:25
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