BUSINESS Wall Street opens higher ahead of a busy week for earnings

BUSINESS

Wall Street opens higher ahead of a busy week for earnings

AP

22:07, October 19, 2020

Stocks are edging higher on Wall Street at the beginning of another busy week for corporate earnings news. The S&P 500 climbed 0.5% in the first few minutes of trading Monday. The benchmark index is coming off its third straight weekly gain. IBM will report its latest quarterly results after the closing bell, while Netflix, Comerica and Procter & Gamble will follow on Tuesday. Traders were encouraged to see that China’s economy grew at a nearly 5% annual pace in the last quarter as it emerged from pandemic lockdowns. Prospects for getting another U.S. stimulus package done before the election seemed to fade.

THIS IS A BREAKING NEWS UPDATE: AP’s earlier story appears below.

European shares got off to a strong start Monday after China reported that its economy grew at a nearly 5% annual pace in the last quarter.

U.S. futures were higher and the futures for the S&P 500 and Dow industrials also advanced. Most Asian benchmarks also climbed.

China was the first country to suffer coronavirus outbreaks and the first major economy to emerge from the pandemic and begin reopening from pandemic shutdowns. That’s providing a boost to other countries that rely heavily on trade with China.

Britain's FTSE 100 was flat at 5,922.31, while Germany's DAX gained 0.3% to 12,941.73. The CAC 40 in Paris jumped 0.8% to 4,976.15. The future contract for the S&P 500 surged 0.9% while the future for the Dow industrials rose 0.8%.

After contracting 6.8% in the first quarter of this year the Chinese economy grew 3.2% in the April-June quarter and 4.9% in July-September.

Both the annual growth and a 2.7% quarterly expansion were weaker than hoped for. Still, the recovery of Asia's largest economy is good news for other countries that rely heavily on trade with China, including Japan. It reported Monday that its exports fell at a slower pace in September from a year earlier, partly thanks to higher demand from China.

The Nikkei 225 index added 1.1% to 23,671.13 while Hong Kong's Hang Seng climbed 0.6% to 24,542.26. In South Korea, the Kospi edged 0.2% higher to 2,346.74, while the S&P/ASX 200 in Australia surged 0.9% to 6,229.40.

The Shanghai Composite index shed early gains, falling 0.7% to 3,312.67 as investors logged profits on the expectation that the data have doused the chances for major stimulus measures that might help boost markets.

Thailand's stock benchmark dropped 2.1% as political protests that have rocked Bangkok in recent days spread to at least a dozen provinces outside the capital.

Shares rose in India and Southeast Asia. New Zealand's benchmark was flat after Prime Minister Jacinda Ardern handily won a second term in Saturday's election. Ardern's liberal Labour Party took a solid majority, winning 49% of the vote and crushing the conservative National Party, which got 27%.

China's National Bureau of Statistics reported that industrial production rose 5.8% in July-September over the same quarter last year, a marked improvement over the first half’s 1.3% contraction.

Retail sales rose 0.9% over a year earlier, up from a 7.2% contraction in the first half, when consumers already anxious about a slowing economy and a tariff war with Washington tightened their belts.

Meanwhile, hopes for new stimulus for the U.S. economy were muted, with House Speaker Nancy Pelosi saying time is running out to get measures passed before the Nov. 3 election.

Investors have been hoping that Washington would provide more financial support for the economy since July, when a $600-a-week extra benefit for the unemployed expired.

Wall Street closed out a choppy week of trading with more of the same Friday, as a late-afternoon stumble led U.S. stock indexes to a mixed finish.

The mixed performance matched the mixed data: the U.S. government reported that retail sales rose in September for the fifth straight month, while the Federal Reserve said U.S. industrial production had its weakest showing since the spring.

Rising coronavirus caseloads across the globe have left investors cautious as governments impose fresh restrictions to contain outbreaks.

The 10-year Treasury yield rose to 0.77% from 0.74%.

U.S. benchmark crude oil dropped 18 cents to $40.94 per barrel in electronic trading on the New York Mercantile Exchange. It gave up 12 cents on Friday to $41.12 per barrel. Brent crude, the international standard, lost 20 cents to $42.73.

In currency dealings, the dollar slipped to 105.34 Japanese yen from 105.40 on Friday. The euro strengthened to $1.1758 from $1.1717.

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