World Stocks Drift Friday 10/21 05:48
World stock markets drifted Friday as investors increasingly factored in a
Fed rate hike soon, based on the brightening U.S. corporate and economic
HONG KONG (AP) --- World stock markets drifted Friday as investors
increasingly factored in a Fed rate hike soon, based on the brightening U.S.
corporate and economic outlook.
KEEPING SCORE: European shares were slightly higher in early trading, with
France's CAC 40 edging up less than 0.1 percent to 4,541.82 and Germany's DAX
creeping 0.1 percent higher to 10,708.34. Britain's FTSE 100 also ticked 0.1
percent higher to 7,030.78. U.S. stocks were poised to open lower, with Dow
futures slipping 0.2 percent to 18,069.00 and broader S&P 500 futures dipping
0.2 percent to 2,132.10.
FED OUTLOOK: Investors are starting to factor in a higher chance of the Fed
raising interest rates from the ultralow levels that have fueled a multiyear
stock boom, given the latest corporate and economic data. Most U.S. companies
have posted quarterly earnings that have beaten analysts' expectations.
Meanwhile, weekly applications for jobless benefits remained near a 43-year low
while home sales rose at their strongest pace since June, reports said Thursday.
ANALYST INSIGHT: "While expectations for a December Fed rate hike are
continuing to build, investment markets seem to be taking it a bit better than
was the case in the run up to last December's eventual rate hike," Shane
Oliver, head of investment strategy at AMP Capital, said in a report. He cited
three differences from a year ago: a more positive global and U.S. growth
outlook; U.S. earnings bottoming out rather than getting worse; and lower
uncertainty over capital outflows from China and its yuan currency.
ECB STIMULUS: At a news conference on Thursday, the head of the European
Central Bank kept alive the possibility that it could extend its stimulus
program beyond March, the earliest possible end date. Mario Draghi said a
decision on the 1.7 trillion euro ($1.9 trillion) bond-buying program would not
come until December, which was widely expected. But he added it's unlikely
there would be an "abrupt end" to the program. That sent the euro lower.
ASIA'S DAY: Japan's benchmark Nikkei 225 index lost 0.3 percent to end at
17,184.59 and South Korea's Kospi lost 0.4 percent to 2,033.00. The Shanghai
Composite Index in mainland China edged up 0.2 percent to 3,090.94 while
Australia's S&P/ASX 200 lost 0.2 percent to 5,430.30. Benchmarks in Southeast
Asia were mixed. Hong Kong's stock market was closed due to a typhoon.
CURRENCIES: The dollar slipped to 103.82 yen from 104.08 on Thursday. The
euro weakened to $1.0888 from $1.0927. The official exchange rate for the
Chinese currency yuan fell to a six-year low against the dollar of 6.7558 yuan,
as investors bet that an eventual interest rate hike in the U.S. will boost the
ENERGY: Oil prices stabilized. Benchmark U.S. crude gained 8 cents to $50.72
a barrel in electronic trading on the New York Mercantile Exchange. The
contract fell $1.17, or 2.3 percent, to close at $50.43 a barrel on Thursday.
Brent crude, used to price international oils, gained 10 cents to $51.48 a
barrel in London.