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World Stocks Advance on Wall St. Surge 05/20 04:53
World stocks advanced Monday after U.S. stock indexes drifted near their
records, with the Dow Jones Industrial Average closing above 40,000 for the
first time.
HONG KONG (AP) -- World stocks advanced Monday after U.S. stock indexes
drifted near their records, with the Dow Jones Industrial Average closing above
40,000 for the first time.
Oil prices climbed as investors focused on the Middle East, where a
helicopter carrying Iranian President Ebrahim Raisi and other officials crashed
in the mountainous northwest reaches of Iran on Sunday.
European markets started the week higher with Britain's FTSE 100 gaining
0.3% to 8,447.28. Germany's DAX added 0.4% to 18,770.02 and the CAC 40 in Paris
climbed 0.4% to 8,197.72.
The future for the S&P 500 edged 0.1% higher, and that for the Dow Jones
Industrial Average was up less than 0.1%.
China's market extended last week's gains after the central bank announced
new support for the property industry, including cutting required down payments
for housing loans, cutting mortgage interest rates for first and second home
purchases and removing a mortgage rate floor.
The Hang Seng in Hong Kong added 0.3% to 19,608.30, with its property index
up 0.3%. Country Garden Holdings, one of many financially troubled developers,
saw its U.S.-listed shares surge 18.5% on Friday after the policy was announced.
The Shanghai Composite index advanced 0.5% to 3,171.15.
On Monday, China's central bank left the one- and five-year loan prime rate
unchanged at 3.45% and 3.95%, in line with expectations. The one-year LPR
serves as the benchmark for most new and outstanding loans in China, while the
five-year rate affects the pricing of property mortgages.
In Tokyo, the Nikkei 225 index climbed 0.7% to 39,069.68. Australia's
S&P/ASX 200 gained 0.6% to 7,863.70. The Kospi in Korea rose 0.6% to 2,742.14.
Elsewhere, Taiwan's Taiex edged 0.1% higher after Lai Ching-te was
inaugurated as Taiwan's new president. Lai is expected to uphold the island's
de facto independence policy from China and seek to bolster its defenses
against Beijing, which claims the island as Chinese territory.
In Bangkok, the SET was up 0.1%.
On Friday, the Dow rose 0.3% to 40,003.59. It and other indexes on Wall
Street have been climbing since the autumn of 2022 as the U.S. economy and
corporate profits have shown resilience despite high inflation, the punishing
effects of high interest rates and worries about a recession that seemed
inevitable but hasn't arrived.
The S&P 500, which is the much more important index for Wall Street and most
retirement savers, added 0.1%, closing out a fourth straight week of gains. The
Nasdaq composite slipped 0.1% to 16,685.97.
A report last week rekindled hopes that inflation is finally heading back in
the right direction after a discouraging start to the year. That in turn
revived hopes for the Federal Reserve to cut its main interest rate at least
once this year.
The federal funds rate is sitting at its highest level in more than two
decades, and a cut would goose investment prices and remove some of the
downward pressure on the economy.
The hope is that the Fed can pull off the balancing act of slowing the
economy enough through high interest rates to stamp out high inflation but not
so much that it causes a bad recession.
Of course, now that a growing percentage of traders are betting on the Fed
cutting rates two times this year, if not more, some economists are cautioning
the optimism may be going too far. It's something that happens often on Wall
Street.
In the bond market, the yield on the 10-year Treasury rose to 4.43% from
4.38% late Thursday.
In other trading Monday, benchmark U.S. crude oil was up 2 cents at $79.60
per barrel. Brent crude, the international standard, added 24 cents to $84.22
per barrel.
The U.S. dollar rose to 155.76 Japanese yen from 155.55 yen. The euro rose
to $1.0874 from $1.0871.
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