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GLOBAL MARKETS-Stocks rebound, dollar gains on outlook for earnings

Published 04/04/2018, 01:43 am
Updated 04/04/2018, 01:50 am
GLOBAL MARKETS-Stocks rebound, dollar gains on outlook for earnings
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(Adds U.S. market open, byline, dateline; previous LONDON)

* Wall Street gains as tech recovers

* Dollar gains as risk appetite improves, outlook still weak

* Oil steadies after 3.7 percent slump

By Herbert Lash

NEW YORK, April 3 (Reuters) - Global equity markets edged higher on Tuesday amid a bright outlook for corporate earnings, while the U.S. dollar rose as concerns eased over a continuing China-U.S. trade spat.

Oil prices edged up after posting their biggest one-day fall in almost a year on Monday, though higher Russian output and Saudi Arabia possibly cutting its selling prices acted as a drag on crude trading. O/R

Financial markets remained cautious after China said Sunday it would raise tariffs on 128 U.S. products, deepening a dispute between the world's two biggest economies and stoking jitters about the potential impact of the trade standoff on global growth. Treasury yields and benchmark German bunds rose as stock markets firmed and as investors looked ahead to Friday's closely watched employment report for March. U.S. yields had dropped two-month lows on Monday, boosted by safe-haven buying as Wall Street reeled from a recent rout in technology shares.

MSCI's gauge of stocks across the globe .MIWD00000PUS gained 0.04 percent but the pan-European FTSEurofirst 300 index .FTEU3 of leading regional shares lost 0.30 percent.

After being shut for Easter Monday and feeling that impact a day later, Europe's main bourses in London .FTSE , Paris .CAC40 and Frankfurt .GDAXI were down. .EU

Tech stocks, following a recent rout that began in the U.S., remained a pressure point in Europe .SX8P after renewed criticism of Amazon (NASDAQ:AMZN) by U.S. President Donald Trump. The drop also came on reports that Apple (NASDAQ:AAPL) intended to make more of its own parts, news that slammed European chipmakers such as AMS AMS.S and STMicroelectronics STM.MI . .EU

The S&P 500 Information Technology index .SPLRCT has tumbled in recent weeks, ending Monday down about 9.8 percent from a March 12 closing record. Declines in large-cap tech shares was triggered by Trump's recent allegations, made via Twitter, about Amazon's business practices.

Still, the fundamental picture of solid global growth and strong corporate earnings hasn't changed that much, but a White House that was market friendly in 2017 has turned less so in 2018, adding a new twist to markets, said Larry Hatheway, chief economist at GAM Investment Management in Zurich.

"If equities are going to find a solid foundation to recover some of the losses they suffered over the last two months, it's probably going to be on the basis that companies can still demonstrate earnings and fundamental reasons that earnings story is intact," Hatheway said, speaking in New York.

The Dow Jones Industrial Average .DJI rose 168.87 points, or 0.71 percent, to 23,813.06. The S&P 500 .SPX gained 11.08 points, or 0.43 percent, to 2,592.96 and the Nasdaq Composite .IXIC added 15.67 points, or 0.23 percent, to 6,885.79.

Traders were looking to a near $25 billion float of music app Spotify to lift the tech gloom, after a clobbering on Monday had pushed the benchmark S&P 500 index ESc1 , the Dow 1YMc1 and Nasdaq NQc1 below pivotal technical levels. .N

The dollar rebounded from an early fall on concerns about U.S.-China trade tensions.

The dollar index .DXY , tracking it against a group of major currencies, rose 0.13 percent, with the euro EUR= down 0.23 percent to $1.2272. The Japanese yen JPY= weakened 0.64 percent versus the greenback at 106.57 per dollar.

Asia's shares had stumbled overnight, though its moves too had been small compared to Wall Street where the S&P 500 closed below its 200-day moving average for the first time since Britain's 2016 vote to leave the European Union .N .

Japan's Nikkei .N225 ended down 0.45 percent, after initially falling as much as 1.6 percent. China's Shanghai Composite index .SSEC eased 0.9 percent and the blue-chip CSI300 .CSI300 was off 0.7 percent.

The slight recovery in risk appetite meant U.S. Treasuries, German Bunds and UK Gilts all saw a bit of selling too in Europe. Yields on 10-year notes US10YT=TWEB DE10YT=RR GB10YT=RR were all off two- to three-month lows. GVD/EUR

Benchmark 10-year U.S. Treasury notes US10YT=RR last fell 15/32 in price to yield 2.7844 percent.

U.S. crude CLcv1 rose 0.79 percent to $63.51 per barrel and Brent LCOcv1 was at $68.12, up 0.71 percent on the day.

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