US Economic News Shores Up Markets
A run of positive U.S. economic and corporate news shored up markets Tuesday a day after investors were spooked by big falls in commodity prices - notably gold - as well as growing concern over the U.S. and China, the world’s two-largest economies.
Monday’s explosions in Boston, which killed three people, had also provided investors with a stark reminder of the threats posed by terrorists to a fragile global economic recovery.
However, some of the concerns that dominated trading on Monday were eased by news that U.S. housing starts rose in March to a little over 1 million to a near five-year high. Subdued inflation for the month together with another solid increase in industrial production also helped shore up the market mood.
"Strong industrial production and housing starts data for March suggest that the U.S. economy saw a robust end to the first quarter, but nagging doubts persist about the sustainability of such impressive growth in the spring," said Chris Williamson, chief economist at Markit.
And with Coca-Cola, Goldman Sachs and Johnson & Johnson reporting better-than-expected first-quarter profits, the scene was set for U.S. stock indexes to recoup a chunk of their previous day’s losses - the Dow Jones industrial average was up 0.7 percent at 14,708 while the broader S&P 500 index rose 0.8 percent to 1,565.
In Europe, most markets saw early losses erased following the perky opening on Wall Street. Germany’s DAX was up 0.2 percent at 7,728 while the CAC-40 in France rose 0.1 percent to 3,714. The FTSE 100 index of leading British shares remained in negative territory, however, trading 0.2 percent lower at 6,331.
A key point of interest in financial markets over the past few days has been the gold price, which has fallen dramatically amid a welter of concerns, including fears that European governments may sell the precious metal as part of their debt-fighting measures.