By Herbert Lash
NEW YORK (Reuters) – Upbeat data helped send world shares to a fourth all-time high in less than a month on Thursday as Wall Street edged higher in anticipation of solid earnings, while crude oil gained on evidence of stronger demand in China.
Stocks were buoyed in Asia and elsewhere a day after Federal Reserve Chair Janet Yellen signaled a rise in interest rates would be less aggressive than some investors had expected.
Sentiment was also boosted after China reported upbeat data on exports and imports for June, the latest sign that global growth is picking up a bit.
That offset reports of higher production by key members of the Organization of the Petroleum Exporting Countries in a report by the International Energy Agency (IEA), lifting oil prices.
The Chinese trade data pushed Asian shares up more than 1 percent and lifted MSCI’s 47-country gauge of global equity markets to a fresh record high with a gain of 0.34 percent.
“Yesterday’s move was in response to Yellen comments that should inflation remain below the 2 percent target rate, the central bank will be less aggressive in their tightening program,” said Sam Stovall, chief investment strategist at CFRA Research.
“Today, the market is saying that’s old news and let’s focus on the matter at hand, which is earnings that will be coming out in earnest this week,” Stovall said.
U.S. shares rose in anticipation second-quarter earnings will grow 7.8 percent for S&P 500 companies, according to Thomson Reuters data.
Major banks, including JPMorgan Chase, Citigroup and Wells Fargo, will report results on Friday. JPMorgan rose 0.64 percent, Wells Fargo gained 0.78 percent and Citigroup added 0.15 percent, helping the financial sector to boost the benchmark S&P 500 the most.
The Dow Jones Industrial Average closed up 20.95 points, or 0.1 percent, to 21,553.09. The S&P 500 gained 4.58 points, or 0.19 percent, to 2,447.83 and the Nasdaq Composite rose 13.27 points, or 0.21 percent, to 6,274.44.
In Europe, the pan-regional FTSEurofirst 300 index of leading shares rose 0.29 percent to close at 1,518.91.
Encouraging U.S. economic data initially supported the dollar. The number of Americans filing for unemployment benefits fell last week for the first time in a month and producer prices unexpectedly rose in June. The data likely will keep the Fed on track for a third interest rate increase this year.
The dollar index fell 0.02 percent, while the euro slid 0.06 percent to $1.1403. The Japanese yen weakened 0.09 percent versus the greenback at 113.24 per dollar.
Yellen told a Senate panel on Thursday in a hearing focused on regulatory reform and a discussion of lagging productivity that it would be “quite challenging” for U.S. growth to reach a 3-percent target set by President Donald Trump.
Oil prices rose after dropping in recent weeks to levels not seen since the end of last year as investors lost faith in a deal between the Organization of the Petroleum Exporting Countries and non-OPEC producers to reduce output.
U.S. shale oil production also has risen sharply.
Brent crude rose 68 cents to settle at $48.42 a barrel. U.S. light crude settled up 59 cents at $46.08.
U.S. Treasury yields rose after falling for three straight days, tracking gains in German bond yields with solid U.S. economic data supporting their trend higher.
Benchmark 10-year U.S. Treasury notes fell 4/32 in price to yield 2.3426 percent.
The German 10-year Bund rose 2 basis points to yield 0.533 percent.
(Additional reporting by Saqib Iqbal Ahmed in New York; Ankur Banerjee and Tanya Agrawal in Bengaluru; Editing by Bernadette Baum and Nick Zieminski)
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