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NEW YORK (AP) Wall Street is ticking higher as it heads for its best week since March despite a long list of concerns. The S&P 500 was up 0.2% in early trading Friday and on track for a 2% gain for the week. That would break a long, listless period where it neither rose nor fell 1% for six consecutive weeks. The Dow was slightly higher, while the Nasdaq composite was up 0.2%. The growing hope that the US government can avoid a catastrophic bankruptcy of its debt has been one of the major drivers of the market.
THIS IS A BREAKING NEWS UPDATE. AP’s earlier story follows below.
Wall Street pointed to gains before the bell on Friday, potentially putting markets in their best week since March, as optimism about a US debt ceiling deal grew towards the weekend.
Futures for the Dow Jones Industrials and the S&P 500 each rose 0.2% in premarket trading.
The hope is high that the US Congress will reach an agreement to prevent the country from defaulting.
President Joe Biden, in Hiroshima for the Group of Seven summit of major industrialized nations, has said he is confident in striking a deal with the Republicans to allow the US government to increase its credit limit and borrow more.
The US government is scheduled to run out of money to pay its bills by June 1 unless a deal is struck, and economists say a US federal default could have catastrophic consequences for financial markets and the economy.
Equities have remained remarkably resilient since early April, despite a long list of concerns. A major reason for this is the hope that the Federal Reserve will ease up on its interest rate hikes, which have slowed inflation at the cost of risking a recession and driving prices down in the financial markets.
The widespread guess was that the Fed would take a break at its next meeting in June. But Dallas Fed President Lorie Logan tempered some of those hopes in a prepared speech to the Texas Bankers Association.
In after-hours trading early Friday, Foot Locker fell more than 25% after the footwear and athletic equipment retailer cut its full-year forecast after missing its first-quarter sales and profit targets.
Deere & Co. rose more than 3% after the farm equipment company beat Wall Street forecasts and raised its full-year outlook.
In Europe, the French CAC 40 was up 0.8% in the afternoon, the German DAX was up 0.7% and the UK FTSE 100 was up 0.4%.
The Japanese benchmark Nikkei 225 rose 0.8% to close at 30,808.35. That was the highest closing price for the index in about 33 years. Japan’s consumer price index data for April showed a 3.4% increase over the previous year, indicating that inflationary pressures eased as prices fell in the rest of the world.
The Australian S&P/ASX 200 gained 0.6% to 7,279.50. South Korea’s Kospi added 0.9% to 2,537.79.
Chinese stocks fell on renewed concerns sparked by signs that an extended lockdown due to the coronavirus pandemic was hurting sales. Inflationary pressures and geopolitical risks also weighed on Chinese stocks, analysts said.
The Hong Kong Hang Seng fell 1.4% to 19,450.57, while the Shanghai Composite lost 0.4% to 3,283.54.
While the broader risk environment has single-handedly improved with progress on the US debt ceiling negotiations, Chinese equities continue to compete for gains, said Yeap Jun Rong, market analyst at IG.
In energy trading, US benchmark crude rose $1.10 to $72.96 a barrel. Brent crude, the international standard, added $1.15 to $77.01 a barrel.
In currency trading, the US dollar fell from 138.66 yen to 138.37 Japanese yen. The euro was priced at $1.0811, an increase of $1.0777.
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Kageyama reported from Tokyo; Ott reported from Silver Spring, Maryland.
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