- Wall Street climbs after retail sales beat expectations
- U.S. dollar gains after hitting 16-month high
LONDON/WASHINGTON, Nov 16 (Reuters) – Wall Street opened higher on Tuesday as the dollar extended gains and strong U.S. retail sales data tempered concerns about the global economy.
On Tuesday, the Commerce Department reported that U.S. retail sales increased more than expected in October as shoppers kicked off the holiday-buying season, rising 1.7%, ahead of economist expectations. read more
The Dow Jones Industrial Average (.DJI) rose 0.39%, the S&P 500 (.SPX) gained 0.28% and the Nasdaq Composite (.IXIC) climbed 0.23%.
The MSCI world equity index (.MIWD00000PUS), which tracks shares in 45 nations, rose 0.09%.
The fresh data, coupled with retailers Walmart (WMT.N) and Home Depot (HD.N) increasing their holiday forecasts, suggested that consumers were not as affected by inflation gains as some other reports had indicated.
That led to optimism the United States could continue to drive the global recovery from the COVID-19 pandemic.
“With the robust retail sales read and solid start to retail earnings, it’s crystal clear that inflation isn’t standing in the way of consumers,” said Mike Loewengart, managing director of investment strategy at E*Trade Financial.
“This could serve as the vote of confidence investors needed signalling that the economy is still chugging along nicely.”
The retail data added to a more buoyant mood after after U.S. President Joe Biden and Chinese leader Xi Jinping held more than three hours of virtual talks.
The conversation between the leaders of the world’s biggest economies appeared to yield no immediate outcome but is widely seen as a joint effort to improve icy relations and avoid direct confrontation. read more
“Markets are trading north courtesy of the Biden-Xi virtual summit which seems to have somewhat defused U.S.-China tensions,” said Stephane Ekolo, global equity strategist at Tradition in London.
“Market participants view such a summit as a positive effort to stabilise a tense relationship, fuelling risk-on mode appetite,” he added.
The U.S. dollar continued its strong run after hitting a 16-month high on Monday against other major currencies. The dollar index (.DXY), which tracks the greenback versus a basket of six currencies, rose 0.31% to 95.701. read more
U.S. Treasury yields also ticked up following the retail data. Benchmark 10-year notes were last at 1.62%, up from 1.61% before the data was released.
Oil struggled to retain earlier gains, with Brent crude last down 0.18% at $81.9 a barrel, and U.S. crude slipping 0.56% at $80.43 per barrel. Oil prices have come under pressure from the prospect high energy prices could drive increased production and lead to an oil supply surplus. read more
Spot gold prices fell 0.11% to $1,860.34 an ounce after posting a five-month high in earlier trading.
Reporting by Julien Ponthus and Alun John in London and Pete Schroeder in Washington; Editing by Sam Holmes, Shri Navaratnam, Robert Birsel, Timothy Heritage and Barbara Lewis
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