Wall Street lifted by healthcare, tech stocks; dollar edges higher

Many Asian, European markets shut for May Day

NEW YORK, May 1, (Agencies): US shares gained on Friday after two straight sessions of losses on a rebound in healthcare and technology stocks, while the dollar rose from nine-week lows on signs that the US economy may be stabilizing after a recent soft patch.

A majority of the 10 major US S&P indexes were higher, with the health and tech indexes both snapping 2-day losing streaks. Apple shares were higher and were the biggest driver on the Dow, Nasdaq and S&P 500.

All major European markets except London, its biggest, were closed on Friday for the May Day holiday, while many Asian markets were also shut. London’s FTSE 100 index inched into positive territory after miners advanced on expectations of further stimulus in China, the world’s top metals consumer.

The gains in US shares came after weak earnings reports had contributed to losses in the previous two sessions. The rise also came despite data showing that construction spending fell in March to a six-month low, while ISM data showed manufacturing growth held at its slowest in almost two years in April.

Data showing a jump in consumer sentiment, however, was a bright spot in recent economic reports and supported the dollar.

The MSCI world equity index was last up 0.65 points or 0.15 percent, to 436.95.

The Dow Jones industrial average was last up 146.15 points, or 0.82 percent, at 17,986.67. The S&P 500 was last up 15.52 points, or 0.74 percent, at 2,101.03. The Nasdaq Composite was up 40.75 points, or 0.82 percent, at 4,982.17.

The dollar index, which measures the greenback against a basket of six major currencies, rose after posting its worst month in four years in April. The index was last up 0.6 percent at 95.166 after hitting a nine-week low of 94.399 on Thursday.

The euro was last down 0.1 percent against the dollar at $1.12105 after hitting a more than nine-week high against the dollar of $1.12900 earlier in the session.

Oil prices eased off 2015 highs after Iraq said its crude exports hit a record in April, keeping Middle East production well above demand. Brent crude was last down 73 cents at $66.05 a barrel. US crude was last down 80 cents at $58.83 per barrel.

“If markets don’t tighten as quickly as people are expecting, the sell-off can be large,” said Amrita Sen, chief oil analyst at Energy Aspects.

Gold futures were last down 0.89 percent, at $1,171.9 an ounce.

US

Wall Street was higher at midday on Friday, with the Nasdaq recording gains for the first time this week, as healthcare and technology stocks rebounded, and as data pointed to a pick-up in economic activity.

Amajority of the 10 major S&P indexes were higher, with both the health and tech indexes moving up after two days of losses. The Nasdaq biotech index was up 2.6 percent, ending a 5-day losing streak.

Gilead led the gains on the Nasdaq and the S&P 500 with a 4.4 percent increase to $104.90. The company’s quarterly profit nearly doubled, driven by strong sales of its hepatitis C drugs. Apple rose 0.8 percent to $126.13.

“Its a new month and big institutional investors that allocate on a monthly basis are still moving money into the market,” said Adam Sarhan, chief executive of Sarhan Capital in New York.

Investors also welcomed an encouraging batch of data for April that suggested the economy was pulling out of a first-quarter soft patch.

Consumer sentiment jumped and vehicle sales were stronger-than-expected in April, while manufacturing expansion in the month held steady at near a two-year low.

“Certainly, the first quarter was slow,” said Paul Nolte, portfolio manager at Kingsview Asset Management in Chicago.

“We anticipate a little bit of a pick up in the second and third quarter. Its not going to be enough to warrant the Fed to raise rates but its certainly not weak enough to push us into recession.”

At 12:08 pm EDT (1608 GMT) the Dow Jones industrial average was up 91.98 points, or 0.52 percent, at 17,932.5, the S&P 500 was up 9.69 points, or 0.46 percent, at 2,095.2 and the Nasdaq Composite was up 22.96 points, or 0.46 percent, at 4,964.38. Railcar makers gained after the United Stated and Canada announced new tougher oil-train safety standards that included rules to phase out older tank cars in three years.

Greenbrier gained 5 percent to $60.59, while Trinity Industries rose 3.7 percent to $28.10. American Railcar was up 2.4 percent at $54.33.

Yum Brands jumped 5.5 percent to hit a record high of $90.70 after Daniel Loeb’s Third Point revealed a stake in the company and said the KFC-owner had “turned the page” on its China troubles and forecast a dramatic profit recovery.

LinkedIn shares slumped 20.9 percent to $199.37, a day after the professional social network operator slashed its full-year profit forecast.

UK

Britain’s top equity index gained ground on Friday as a surge in the shares of Lloyds bank and miners boosted the market, although caution before next week’s national election kept a lid on the progress.

Lloyds soared 7.1 percent after reporting profits at the top end of analysts’ forecasts.

Miners such as Anglo American and Rio Tinto also rallied after data showing that China’s factories struggled to grow in April reinforced expectations that China — the world’s biggest metals consumer — will roll out more measures to support its slowing economy.

Lloyds was the best-performer on the blue-chip FTSE 100 index, which closed up 0.4 percent at 6,985.95 points.

The FTSE hit a record high of 7,122.74 points on April 27 but has since edged back, as caution has set in among investors before next Thursday’s British election. The index remains up by around 6 percent since the start of 2015.

“The (election) result looks too close to call so a lot of people will be looking to bank some profits ahead of the vote,” said Dafydd Davies, partner at Charles Hanover Investments.

Opinion polls put the right-wing Conservatives, who lead the current coalition government, neck-and-neck with the opposition left-wing Labour party, while the Scottish National Party could emerge as the third-biggest party.

A further risk also stems from the Conservatives’ promise of a referendum on Britain’s membership of the European Union by the end of 2017, if they win.

Davies said certain sectors could underperform more than others next week, such as utilities and housebuilders.

Labour says it would ensure cheaper energy costs for consumers by the end of this year if it wins the election.

Labour has also promised to empower the energy regulator to force prices down and has set out plans to reform the property and housebuilding sectors, such as by introducing rent controls. This has already affected shares in those industries.

Utility and property companies such as United Utilities and Land Securities fell on Friday, making them some of the weakest stocks in the FTSE 100.

“Uncertainty ahead of the UK election appears to be dampening sentiment, particularly with regards to the property and utility stocks,” said Keith Bowman, analyst at Hargreaves Lansdown.

“With Europe mostly out of action for May Day, it was a quiet day in London, but at least the traditionally weak period for equities has started off on the right foot,” said analyst Chris Beauchamp at trading firm IG.

“Miners continue to dominate the top end of the FTSE 100 on revived hopes that the Chinese government will be hustled into fresh stimulus measures by the general lack of strength in economic data,” he said.

The mining companies showing the biggest gains were Anglo American, which was up 5.43 percent at 1,165 pence, Rio Tinto (+3.88 percent at 2,997 pence) and BHP Billiton (+2.98 percent at 1,607.5 pence).

Shares in state-rescued Lloyds Banking Group jumped 7.09 percent to 82.87 pence after it announced a strong operational performance even though net profits sank by a fifth in the first quarter.

The results were better than had been expected.

On the downside, Prudential shares sagged 1.04 percent, closing at 1,612 pence after the group appointed Mike Wells as new chief executive to replace Tidjane Thiam.

On Thursday, Frankfurt’s DAX 30 index gained 0.19 percent to 11,454.38 points while the Paris CAC 40 rose 0.14 percent at 5,046.49 points.

Both key eurozone markets will reopen on Monday, when London will have a holiday closure.

Jasper Lawler, an analyst at CMC Markets, said the rise in the euro would be the trend to watch.

“The strength of the euro and corresponding jump in bund yields has been an issue for export-orientated German stocks,” he said. “Germany’s benchmark stock index, the DAX, finishing April almost exactly where it started March shows a significant shift in sentiment.

“The slide in prices suggest it may not be until the second half of the year that we see new record stock market highs in Europe, if at all,” he added.

Oil

Oil prices eased off 2015 highs on Friday after Iraq said its crude oil exports hit a record in April, and prices were pressured also by a stronger dollar.

Brent and US crude rallied between 20 and 25 percent in April, helped by a weaker dollar and bets that a global supply glut would ease, following the June-to-January sell-off that halved prices from above $100 a barrel.

News that Iraq’s oil exports rose in April to a record 3.08 million barrels per day (bpd) from 2.98 million bpd in March served as a reminder of ample supply in the market.

Iraq’s data highlights increasing output from OPEC members, whose supply in April rose to its highest in more than two years at 31.04 million bpd, according to a Reuters survey.

June Brent was down 86 cents at $65.92 barrel at 11:37 am EDT (1537 GMT), after matching Thursday’s 2015 peak of $66.93 and jumping 21 percent in April.

US crude for June delivery was down 84 cents at $58.79, after hitting a 2015 high of $59.90. US crude futures gained 25 percent last month.

Trading was thin, with some major markets closed for the May Day holiday.

“What is driving prices these days is less physical markets, which remain very weak, but more expectations of future tightening,” said Amrita Sen, chief oil analyst at Energy Aspects.

Despite a sharp drop in new US shale drilling in recent months, there have been few signs that a global supply glut is easing, and there are some signs that US oil production may not fall significantly in the near future.

Gold

Gold hit six-week lows on Friday in thin trade ahead of the holiday weekend as the dollar strengthened on US economic data and investor sentiment was undermined by longer-term expectations for a US rate rise.

Technical factors were also at play, with downward momentum gathering pace as prices broke through their April low at $1,175 an ounce.

Spot gold fell 1 percent to $1,171.76 an ounce at 1439 GMT, while US gold futures for June delivery were down $11.50 an ounce at $1,170.90. Earlier spot prices fell more than 1 percent to $1,170.20, their lowest since March 20.

Gold hit its highest since early April at $1,215 earlier this week but failed to hold that level after the Federal Reserve signalled on Wednesday that it sees the recent slowdown in the US economy as transitory, not ruling out an interest rate rise this year.