Investors regain their risk appetite

The gains came as first-quarter earnings season kicked off

Wall Street stocks bounced higher yesterday as expectations that lower US taxes would fuel corporate earnings added to easing of nerves over US military conflict with Russia in Syria.

US President Donald Trump signalled that military strikes in Syria may not be imminent, and a strong US earnings season came into focus.

Growth stocks including technology, financial and industrial stocks led gains on the main US indexes. Boeing rose 1.53 per cent and was the biggest boost to the Dow, while Microsoft and JPMorgan rose 1.5 per cent each, lifting the S&P 500.

At 9:45am ET, the Dow Jones Industrial Average was up 1.18 per cent at 24,474.26. The S&P 500 gained 0.87 per cent to 2,665.14 and the Nasdaq Composite rose 0.91 per cent to 7,133.66. The gains came as first-quarter earnings season kicked off. “We’re seeing some early optimism ahead of earnings and there’s no bad news for the moment, be it back and forth between Russia and the US or trade war situation,” said Andre Bakhos, managing director at New Vines Capital LLC in Bernardsville. “This is first full quarter with new taxes ... that is a variable that could work very positively in the favour of investors.”

European shares, too, began to recover yesterday. MSCI’s world equity index was down for the second day but European shares managed a 0.4 per cent gain as risky assets regained the upper hand.

Sentiment in European stocks improved ahead of Wall Street’s open with futures up 0.6 per cent.

Investors’ expectations for very strong results from US corporates in the quarterly earnings season kept them from turning overly bearish on stocks despite political risks.

The world’s biggest asset manager, BlackRock, kicked off the earnings season with profit ahead of estimates.