US and European stocks rise as euro plunges to lowest since 2017

FILE PHOTO – A stockbroker works at the Frankfurt Stock Exchange as markets react to the coronavirus disease (COVID-19), at the Frankfurt Stock Exchange, Germany March 27, 2020. REUTERS/Kai Pfaffenbach

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WASHINGTON/LONDON, April 27 (Reuters) – Major U.S. equity indices closed higher after choppy trading on Wednesday, driven by strong profits from Microsoft and Visa, as commodities stocks lifted European stocks to their first gain in four sessions.

The euro fell to its weakest level since 2017 after Russia cut off gas supplies to Bulgaria and Poland, and investors grew more worried about the region’s economy.

The dollar continued to soar, on track for its biggest monthly gain since January 2015 as expectations mounted that the US Federal Reserve would hike interest rates aggressively in the coming months and the American economy would be stronger than the euro zone.

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The Dow Jones Industrial Average (.DJI) rose 0.19% to end at 33,301.93 points, while the S&P 500 (.SPX) gained 0.21% to 4,183.92.

The Nasdaq Composite (.IXIC) fell 0.01% to 12,488.93.

Microsoft Corp (MSFT.O) jumped 4.8%% and Visa Inc (VN) jumped 6.5%% on strong earnings, helping boost the S&P 500.

Some of Wall Street’s biggest names reported results this week as investors sought a counterweight to the deluge of negative news that hit stocks. Read more

Alphabet Inc (GOOGL.O), Google’s parent company, fell 3.6% as slowing YouTube ad sales pushed quarterly revenue below expectations. Boeing Co (BA.N) fell 7.5% after disclosing $1.5 billion in abnormal costs related to the shutdown of 777X production. Read more

The pan-European STOXX 600 (.STOXX) rose 0.7% after hitting six-week lows at the open, with miners (.SXPP) and oil stocks (.SXEP) both gaining.

German stocks (.GDAXI), which underperformed throughout the session, rallied at the close.

European corporate earnings were mixed. Credit Suisse announced another quarterly loss and Deutsche Bank warned that the Russian-Ukrainian conflict could hurt annual profits. Read more

Russia has cut off the flow of natural gas to Bulgaria and Poland for rejecting its request to pay in rubles, directly targeting European economies. This led investors to sell euros and grab US dollars. Read more

The MSCI benchmark for global equity markets (.MIWD00000PUS) fell 0.17%. Emerging market stocks (.MSCIEF) fell 0.54%.

US Treasury yields rose as investors waited for more clarity on the “restrictive” policy the Fed plans to pursue next week to fight inflation by curbing economic growth.

The euro fell to $1.0512, its weakest level against the dollar since May 2017. Analysts cited the war in Ukraine and growing concerns that the bloc’s economy would slide into recession this year.

“The euro’s glaring inability to rally behind hawkish comments from members of the European Central Bank signifies continued vulnerability to an external environment negatively affected by a still-worrying situation in Ukraine and broad-based USD strength,” they said. wrote ING FX strategists in a note to clients.

The dollar index, measuring the greenback against a basket of rivals, hit a five-year high.

“The U.S. dollar is benefiting from the prospect of a continued flight to safety of cash,” said Jeremy Stretch, head of G10 FX strategy at CIBC.

Euro against US dollar

CHINESE REBOUND

There were more sell-offs in Asia, with MSCI’s broadest index of Asia-Pacific stocks outside Japan (.MIAPJ0000PUS) down 0.82% after hitting its lowest since mid-March. The Tokyo Nikkei (.N225) fell 1.17%.

Australian stocks (.AXJO) fell 0.78% as inflation hit a 20-year high, bringing interest rate hikes closer. Read more

Beaten Chinese stocks (.CSI300) bucked the trend, gaining almost 3%, with data showing faster growth in industrial company earnings in March than a year earlier. Read more

In the previous session, Chinese stocks fell to their lowest level in two years on fears that lingering COVID lockdowns could hurt economic activity and disrupt global supply chains. Read more

Oil prices edged higher on lingering global supply concerns, with Brent futures finishing up 33 cents at $105.32 a barrel and U.S. crude up 32 cents at $105.32 a barrel. $102.02 per barrel.

Spot gold prices hit a more than two-month low and were last down 1.05% at 4:34 p.m. EST (2034 GMT), under pressure from the rallying dollar. US gold futures GCv1 settled down 0.8% at $1,888.70 an ounce.

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Additional reporting by Kanupriya Kapoor and Joice Alves; Editing by John Stonestreet, Mark Heinrich, David Gregorio, Nick Zieminski and Jonathan Oatis

Our standards: The Thomson Reuters Trust Principles.

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