Global stocks, dollar steady as volatility remains low; oil up

European shares hold at 21-month highs

NEW YORK, May 10, (Agencies): Oil prices rebounded on Wednesday after a steeper-than-expected drop in US crude inventories, helping limit equity losses on Wall Street, while European stocks held near their highest in nearly two years.

European full-year earnings forecasts, set to be their best since 2010, and centrist Emmanuel Macron’s victory in France’s presidential election over the weekend have steadied European bourses so far this week.

The pan-European FTSEuro-first 300 index rose 0.05 percent and MSCI’s gauge of stocks across the globe gained 0.05 percent.

MSCI’s All-Country World Index was flat at 459.42.

Oil prices rose after Saudi Arabia said it would cut supplies to Asia and US inventories fell more than expected. Brent crude was last up 2.6 percent to $50.02 a barrel.

In the United States, disappointing results from Dow component Walt Disney and President Donald Trump’s firing of FBI Director James Comey has given equities some pause, but Wednesday’s price action was hardly a selloff, investors said.

Trump said he fired Comey, who had been leading an investigation into the Trump 2016 campaign’s possible collusion with Russia, over his handling of the email scandal.

The Dow Jones Industrial Average fell 21.5 points, or 0.1 percent, to 20,954.28, the S&P 500 lost 0.35 points, or 0.01 percent, to 2,396.57 and the Nasdaq Composite dropped 9.06 points, or 0.15 percent, to 6,111.53.

Traders said Comey’s firing could lead to serious complications for the administration, but without a “smoking gun” that showed Comey’s firing was motivated by something other than Comey’s handling of a probe into then-Democratic presidential nominee Hillary Clinton, there was likely to be limited market reaction.

Measures of market volatility are at rock-bottom. The US VIX index fell on Tuesday to 9.56, its lowest since late 2006.

The dollar fell 0.1 percent against a basket of major currencies after slipping on the view that political uncertainty could derail Trump’s tax reform plans.

The yen, often sought in times of market uncertainty, was last 0.1 percent higher at 113.92 to the dollar. The safe-haven Swiss franc rose against the dollar to a nearly one-month high.

Benchmark 10-year US Treasury yields were down 3.1 basis points to 2.38 percent after retreating from fiveweek highs touched on Tuesday as investors made room in their portfolios for new issuance of government and corporate debt.

Gold rose 0.12 percent to $1,222 an ounce.

US

US stocks struggled for direction on Wednesday as investors weighed a batch of weak corporate earnings and a shock move by President Donald Trump to fire his FBI chief.

Trump’s promise to significantly cut taxes and ease financial regulations has underpinned a record-setting rally on Wall Street since his election in November.

At 12:43 pm ET (1643 GMT), the Dow Jones Industrial Average was down 23.08 points, or 0.11 percent, at 20,952.7, the S&P 500 was up 0.83 points, or 0.03 percent, at 2,397.75 and the Nasdaq Composite was up 0.36 points, or 0.01 percent, at 6,120.94.

Six of the 11 major S&P 500 sectors were lower, with healthcare and consumer discretionary sectors dropping the most. Energy was up 1.2 percent on the back of a 3 percent jump in oil prices.

Disney fell 2.5 percent and was the top drag on the Dow and the S&P 500 after the media company reported lower-than-expected quarterly revenue and a decline in the number of ESPN subscribers.

Allergan dropped 3.6 percent to $230.10 after the Botox-maker posted a quarterly loss as it took a write down on the value of its stake in Teva Pharmaceutical.

Priceline tumbled nearly 5 percent to $1,818 after the travel website operator forecast current-quarter earnings below analysts’ expectations.

One bright spot was Nvidia, which rose 14 percent after the chipmaker reported a better-than-expected jump in quarterly revenue. Shares of rival AMD also rose.

Advancing issues outnumbered decliners on the NYSE by 1,784 to 1,059. On the Nasdaq, 1,390 issues rose and 1,338 fell.

The S&P 500 index showed 20 52week highs and two lows, while the Nasdaq recorded 100 highs and 57 lows.

UK

Britain’s FTSE 100 rose on Wednesday, as strong earnings updates underpinned recent gains and housebuilder Barratt outperformed peers.

The index ended up 0.6 percent, just 0.8 percent below March’s record high of 7,447.00 points.

Earnings growth expectations had been improving not only on the bluechips which benefited from a weaker sterling currency, but also on mid and small-caps, Williams said.

Britain’s biggest housebuilder, Barratt, rose 2.3 percent after it said fullyear profits would be at the top end of its guidance range, and forward sales were at a record level.

Retailers Next, ABF and Kingfisher were also top risers, up 1.5 to 2.3 percent.

Broadcaster ITV fell 2.3 percent after saying advertising revenues could fall as much as 20 percent in June. It kept its guidance for full-year performance unchanged.

Mid-cap TalkTalk’s shares dropped 7.5 percent after the broadband company cut its dividend and missed its forecast for full-year core earnings.

TalkTalk halved its final dividend to 5.0 pence from 10.58 pence a year ago, saying it would focus on returning the business to customer growth.

Vesuvius jumped to the top of the mid-caps, up 8.8 percent after the industrials group said better global steel production would boost its performance and trading had been good so far this year.

Energy provider SSE recouped the previous session’s losses, up 2.6 percent after being one of the worst-performing stocks on Tuesday when Prime Minister Theresa May announced a household energy price cap as part of her manifesto for reelection in June.

Europe

Greek stocks rose for a 12th straight day on Wednesday, the longest run of gains since 1991, outperforming broadly flat European markets as Athens looked set to clinch vital bailout loans.

While the pan-European STOXX 600 index edged up 0.2 percent and the euro zone STOXX index closed flat, Greek’s main equity index rose 1.8 percent.

The gains brought Athens’ benchmark index close to erasing all the losses it made after reopening following an emergency five-week bourse closure in the summer of 2015.

The biggest risers were refiner Motor Oil and National Bank of Greece, up 4.8 and 2.4 percent respectively. The increases came as Greek government borrowing costs hit their lowest level in more than five year.

Elsewhere in Europe, some solid earnings updates and gains among commodity-related stocks on the back of rising crude oil prices provided support.

With the European earnings season more than halfway through, financials are among the strongest performers so far, with almost 70 percent of those financial firms which have reported beating expectations, according to Thomson Reuters I/B/E/S data.

Overall, more than 71 percent of European firms have beaten earnings expectations.

Shares in Belgian hygiene products maker Ontex rose 3.6 percent after the firm reported higher revenue in all of its five divisions.

Well-received earnings boosted shares in French energy firm Rubis, which jumped 6.3 percent to hit a record high. A better than expected earnings update at A2A lifted shares in Italy’s biggest regional utility up 5.4 percent,

But HeidelbergCement fell 1.2 percent after the cement maker reported its first-quarter operating profit slipped 3 percent as a decline in emerging markets failed to offset a significant rise in Europe and North America.

Banks were mixed with BPER Banca falling 5.7 percent after its firstquarter net profit halved as a result of the writedown of its stake in Italian bank rescue fund Atlante. Asia Shanghai stocks surrendered gains to end at their lowest since mid-October, after producer price inflation cooled more than expected and worries persisted over tightening financial regulations.

The blue-chip CSI300 index fell 0.5 percent to 3,337.70 points, down for the 8th straight session, while the Shanghai Composite Index lost 0.9 percent to 3,052.79 points.

The tech-heavy start-up board ChiNext slumped 1.7 percent to end at a 27-month trough, breaking through for the first time the lowest levels seen during the depths of the 2015 stock crash.

Oil

Oil prices rose on Wednesday after Iraq and Algeria joined Saudi Arabia in supporting an extension to OPEC supply cuts and US crude inventories fell more than expected.

But the rise failed to recoup last week’s losses with concerns about rising output from the United States, Libya and Nigeria continuing to weigh.

The industry group the American Petroleum Institute reported a fall in US crude inventories by 5.8 million barrels last week, which was more than the 1.8 million-barrel slide analysts predicted.

Investors are now waiting to see if those numbers are confirmed on Wednesday by official figures on weekly US crude and oil product inventories from the US government’s Department of Energy, due out at 1430 GMT.

Global benchmark Brent crude was up 68 cents at $49.41 a barrel by 1327 GMT. US light crude oil was 69 cents higher at $46.57 a barrel.

Also supporting prices were comments from Algeria’s energy minister on Wednesday that Algeria and Iraq favour extending global supply cuts when OPEC meets later this month.

On Monday, Saudi Arabia’s oil minister Khalid al-Falih said he expected the output deal to be extended to the end of the year or possibly longer.

Gold

Gold edged off the previous day’s eight-week low on Wednesday as US President Trump’s abrupt firing of FBI chief James Comey weighed on US stocks, though gains were capped by expectations of further interest rate increases.

Spot gold was up 0.2 percent at $1,223.42 an ounce by 1405 GMT, while US gold futures for June delivery gained $7.20 to $1,223.40.