Wall Street rebounded, dollar fell on strong earnings, British policy shift

NEW YORK (Reuters) – U.S. stocks jumped on Monday, as did their overseas peers, as solid earnings and a policy reversal from Britain’s new finance minister boosted investors’ appetite for risk.

All three major US stock indexes rose through the starting gate with sharp gains, while Treasury yields slumped and the dollar lost ground.

“More and more economists are embracing a recession,” said Peter Cardillo, chief market economist at Spartan Capital Securities in New York. “This market has ruled out the worst that could happen – a global recession.”

“There is another seasonal factor,” Cardillo added. “Usually when the market discounts everything – and I think it was – usually (the last months of the year) it’s positive for the stock market.”

Stocks braced for a strong open after new British finance minister Jeremy Hunt scrapped Prime Minister Liz Truss’s proposed tax cuts and curbed its energy subsidies, while Bank of America Corp. (BAC.N) Third-quarter results beat the consensus, after they benefited from a series of interest rate increases from the Federal Reserve. Read more Read more

Dow Jones Industrial Average (.DJI) It rose 522 points, or 1.76%, to 30,156.83 points. Standard & Poor’s 500 (.SPX) It rose 93.95 points, or 2.62%, to 3,677.02 points. And the Nasdaq (nineteenth) It added 337.59 points, or 3.27%, to 10,658.98 points.

European stocks rose on the back of the UK’s fiscal policy reversal.

“This has cleared some clouds, but it does not raise the political risks for this government to remain in power for an extended period of time,” Cardillo said.

Meanwhile, the easing of the yuan affected Asian markets.

Pan-European STOXX 600 Index (.stoxx) It rose 2.11% and the MSCI gauge of stocks worldwide (.MIWD00000PUS) 2.15% profit.

Emerging market stocks rose 0.42%. MSCI’s broadest index of Asia Pacific shares outside Japan (MIAPJ0000PUS.) Closed 0.1% lower, while Japan’s Nikkei closed (.N225) It lost 1.16%.

Treasury prices rose, tracking similar moves in the UK bond market, pushing Treasury yields down for the first time in three days.

The benchmark 10-year bond recently rose 11/32 in price to 3.961% from 4.006% late Friday.

The price of the 30-year bond last rose 5/32 to 3.9651% from 3.975% late Friday.

The strength of the euro and the pound sterling caused the dollar to lose against a basket of major global currencies.

The dollar index fell 0.88 percent, with the euro rising 0.82 percent to $0.9799.

The Japanese yen strengthened 0.01% against the dollar at 148.74 per dollar, while the British pound was last traded at $1.1416, up 2.20% on the day.

China’s continued loose monetary policy helped offset recession fears, which pushed up crude oil prices. FRX

US crude rose 0.88% to $86.36 a barrel, and Brent crude was at $92.27, up 0.7% on the day.

A weak dollar has supported gold prices. joules

And the spot gold price rose 1.3 percent to $ 1663.10 an ounce.

(Reporting by Stephen Kolb) Additional reporting by Mark Jones in London Editing by Mark Potter

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