U.S. stocks brush off first wobble of the year to climb again

Stan Choe, The Associated Press</span>
Published Thursday, January 11, 2018 12:51AM EST
Last Updated Thursday, January 11, 2018 10:30AM EST

NEW YORK -- U.S. stocks recovered from their first wobble of the year and ticked higher in Thursday morning trading.

The gains for indexes marked a return to calm for markets, which got a whiff of nervousness a day earlier after interest rates climbed. Rates held steady in Thursday morning trading, and the Standard & Poor's 500 index was on pace for its seventh gain in the last eight days.

KEEPING SCORE: The S&P 500 was up 9 points, or 0.3 per cent, at 2,757, as of 10 a.m. Eastern time. The Dow Jones industrial average rose 86 points, or 0.3 per cent, to 25,455, the Nasdaq composite gained 25 points, or 0.4 per cent, to 7,78 and the Russell 2000 index of small-cap stocks climbed 9 points, or 0.6 per cent, to 1,569.

RATES AT ROOT OF CONCERNS: The yield on the 10-year Treasury note dipped to 2.55 per cent from 2.56 per cent late Wednesday.

Rates have been at centre stage in recent days following the 10-year yield's climb from 2.40 per cent early in the year. It got as high as 2.59 per cent on Wednesday before falling back later in the day.

China's foreign exchange regulator challenged a report from Wednesday that had helped drive up yields, which said China may slow or halt purchases of U.S. Treasurys. A U.S. government report on Thursday also showed that inflation was weaker on the wholesale level last month than economists expected. Weak inflation would likely result in rates staying relatively low.

Investors say they're prepared for a gradual rise in rates, but a quick jump could easily jolt markets out of the calm, upward ride they've been on.

BIGGEST GAINERS: Energy stocks led the way after the price of oil climbed above $64 per barrel for the first time since 2014.

Benchmark U.S. crude gained 55 cents to $64.12 per barrel. Brent crude, the international standard, gained 28 cents to $69.48 per barrel.

That helped drive energy stocks in the S&P 500 to a 1 per cent gain, the largest among the 11 sectors that make up the index.

CALM RIDE: The stock market has repeatedly shrugged off concerns through its placid ride to records. Whether investors are worried about a pickup in rates in the future or about how stocks have become more expensive than they've historically been relative to corporate profits, any dip for the market over the last year has been shallow and short.

That's rewarded investors who have repeatedly "bought the dip" and seen every wobble in prices as a buying opportunity. The next test for the market may arrive in coming weeks as companies report how much profit they made in the last three months of 2017.

Businesses will need to produce big numbers to justify the gains their stocks have made, and expectations are also high that CEOs will unveil encouraging profit forecasts for 2018 after Washington cut their income-tax rates.

MARKETS ABROAD: Japan's Nikkei 225 fell 0.3 per cent, South Korea's Kospi retreated 0.5 per cent and Hong Kong's Hang Seng index edged 0.2 per cent higher.

Britain's FTSE 100 fell 0.1 per cent, France's CAC 40 was down 0.3 per cent and Germany's DAX dipped 0.3 per cent.

CURRENCIES: The dollar edged up to 111.49 Japanese yen from 111.35 yen late Wednesday, and the euro rose to $1.2039 from $1.1957.

COMMODITIES: Gold gained $2.10 to $1,321.40 per ounce, silver lost 4 cents to $17.00 per ounce and copper was close to flat at $3.24 per pound.

AP Business Writer Youkyung Lee contributed from Seoul, South Korea

Let's block ads! (Why?)