Stocks Open Higher on Optimism About Economy
January 24 2020 - 10:02AM
Dow Jones News
By Avantika Chilkoti
U.S. share benchmarks perked up in early New York trading after
European stocks rose Friday in response to fresh economic data that
signaled a halt to the slowdown in the German manufacturing
sector.
The Dow Jones Industrial Average picked up 111 points, or 0.4%,
while the Nasdaq Composite Index added 0.5% and the S&P 500
gained 0.2%.
Earlier, the pan-continental Stoxx Europe 600 index gained
1.2%.
Preliminary data on purchasing managers' indexes, closely
watched measures of business activity, suggested that the
manufacturing sector in the eurozone -- and Germany, in particular
-- fared better than the market had expected in January. Factories
in the region saw export orders begin to stabilize after a long and
deep decline, and while the manufacturing sector continued to
contract, it was at a slower pace than previous months.
"The markets are reacting to the signs of bottoming in German
manufacturing," said Mike Bell, global market strategist at J.P.
Morgan Asset Management. "It's pretty key because the big question
on everyone's mind has been: is there recession risk? And the most
obvious risk there was a downturn in European manufacturing."
Ahead of the opening bell in New York, shares in Intel rose
almost 5%. On Thursday, the giant chip maker reported
fourth-quarter earnings that beat expectations following an upswing
in personal-computer shipments and robust demand for chips to power
data centers.
Rival chip maker Broadcom gained 2.5% in offhours trading after
the company said Thursday that it had secured multiyear supply
agreements to provide wireless components for Apple products.
Within European equities, Ipsen plunged over 21% after the
French biopharmaceutical company paused trials on a drug for
ultrarare bone diseases, and said it is evaluating the implications
on its 2022 financial outlook. Rémy Cointreau retreated more than
9% in Paris after the beverages maker reported disappointing
sales.
Shares in Ericsson dropped 5.3% after higher costs weighed on
the telecommunications equipment company's latest earnings, and it
said expenses will continue to rise this year.
Meanwhile, Carrefour rose 5.5% after the French retailer boosted
its guidance for 2019 earnings, exceeding investors'
expectations.
U.K. stocks also rose, with the FTSE 100 index climbing 1.6%
after the latest purchasing managers index data was better than
analysts expected.
The readings are "the surest sign yet that the economy has
turned a corner since the election," and would likely mean the Bank
of England holds off cutting rates later this month, analysts at
Capital Economics said in a note.
Over in Asia, Japan's Nikkei 225 benchmark closed up 0.1% and
Hong Kong's Hang Seng finished the day up almost 0.2%. Chinese and
Korean markets were closed for public holidays.
Later in the day, IHS Markit is scheduled to publish the latest
PMI data for the U.S., which may show very modest slowdowns in the
manufacturing and services sectors while remaining in expansion
territory.
Write to Avantika Chilkoti at Avantika.Chilkoti@wsj.com
(END) Dow Jones Newswires
January 24, 2020 09:47 ET (14:47 GMT)
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