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Wall St surges on government shutdown’s end, aiding global momentum

The US Senate broke a deadlock and agreed to a short-term funding bill to reopen the government, which allowed Wall Street to have another record day
AFP

New York (AFP) – A deal to end a three-day government shutdown in Washington sent a jubilant Wall Street to a fresh set of records on Monday, as US stocks continued their seemingly irrepressible upward march.

Most other global markets also rose but across the Atlantic results were mixed, with Paris and Frankfurt up while London sagged.

Word of the bargain struck among lawmakers in Washington early Monday afternoon sent all three New York stock indices soaring to fresh heights — the eighth time this year that Wall Street has hit a trifecta of record finishes.

“The market collectively breathed a sigh of relief as the government shutdown is over and it did not get dragged out or disrupt normal Main Street or Wall Street activities,” said Adam Sarhan of 50 Park Investments.

Sarhan said corporate profits again are the central focus of investors, and 68 percent of companies that have reported so far have beaten Wall Street’s estimates.

“Until we have more clarity in respect of what is going to happen on the earnings front in 2018, the bulls deserve the benefit of the doubt,” he told AFP. “The market refuses to fall, even in these extended circumstances.”

Struggling industrial behemoth General Electric, which also is due to post quarterly earnings, fell another 0.6 percent Monday — briefly sinking below $16 per share — after a downgrade of its stock by Bank of America Merrill Lynch.

– A breakthrough in Germany too? –

Meanwhile, prices edged higher in Paris and Frankfurt, after Germany’s center-left Social Democrats voted Sunday to begin formal coalition talks with Chancellor Angela Merkel’s conservatives.

The news, which brought Europe’s top economy a step closer to a new government after months of deadlock, helped guide the euro higher.

“This is a step in the right direction for German politics and traders will be watching it closely,” said CMC Markets UK analyst David Madden.

The thumbs-up will come as a huge relief to Merkel, staving off the threat of snap polls or the unappealing prospect of leading an unstable minority government.

Shares in the French and German telecoms giants, Orange and Deutsche Telekom, were boosted by a report in French daily Le Monde that the two held merger talks between May and September 2017 last year, traders said. Shares of both companies ended the day around two percent higher. 

The report said there were “confidential discussions” held between the two companies examining the options for a “merger of equals.”

 – Key figures around 2200 GMT – 

New York – DOW: UP 0.6 percent at 26,214.60 points (close)

New York – S&P 500: UP 0.8 percent at 2,832.97 (close)

New York – Nasdaq: UP 1 percent at 7,408.03 (close)

London – FTSE 100: DOWN 0.3 percent at 7,708.82 (close)

Frankfurt – DAX 30: UP 0.2 percent at 13,463.69 (close)

Paris – CAC 40: UP 0.3 percent at 5,541.65 (close)

EURO STOXX 50: UP 0.4 percent at 3,665.28 (close)

Tokyo – Nikkei 225: FLAT at 23,816.33 (close)

Hong Kong – Hang Seng: UP 0.4 percent at 32,393.41 (close)

Shanghai – Composite: UP 0.4 percent at 3,501.36 (close)

Euro/dollar: UP at $1.2263 from $1.2225

Pound/dollar: UP at $1.3987 from $1.3860

Dollar/yen: UP at 110.92 from 110.77 yen

Oil – Brent North Sea: UP 42 cents at $69.03 per barrel

Oil – West Texas Intermediate: UP 25 cents at $63.62

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