Global stocks pare gains as investors remain cautious

Global stocks pare gains as investors remain cautious

By David Randall

NEW YORK (Reuters) - Global stocks pared their gains Monday as investors remained cautious despite IBM's $34 billion deal to purchase Red Hat Inc and Standard & Poor's decision to keep Italy's credit rating unchanged.

The Dow Jones Industrial Average rose 133.78 points, or 0.54 percent, to 24,822.09, the S&P 500 gained 19.91 points, or 0.75 percent, to 2,678.6 and the Nasdaq Composite dropped 0.56 points, or 0.01 percent, to 7,166.65.

The Dow had been up by more than 200 points shortly after the opening of trade.

Despite early gains on Monday, investors remained wary of betting on a turnaround in risk. Many indices are already in official correction territory amid heightened worries over corporate earnings and global growth.

"With the volatility of the last week or so, today's stronger open to markets should not be seen as a sea change but more a pause for breath," said Edward Park, investment director at Brooks Macdonald.

Shares in Europe rose broadly following Standard & Poor's decision to leave Italy's sovereign rating unchanged, prompting relief there was no ratings downgrade.

The MSCI world equity index extended early gains to rise 0.4 percent. The index is down 9.3 percent so far this month and has shed $6.7 trillion in market value since its January peak.

Europe's autos sector jumped 4.9 percent, its strongest day since August 2015, after a report that China was considering halving the tax on car purchases in an attempt to boost demand for autos, which has been hurt by a trade war and slowing economic growth.

Asian stock trading was dampened by China’s blue-chip index which tumbled more than 3.3 percent. Chinese data underscored worries of a cooling economy as profit growth at its industrial firms slowed for the fifth consecutive month in September due to ebbing sales of raw materials and manufactured goods.

Analysts have been downgrading their estimates for European earnings at the fastest pace since February 2016, and weak results from internet companies Amazon.com Inc and Alphabet Inc hurt U.S. stocks at the end of last week.

"The only way I can summarize the core sentiment among the European investors I met is something like 'pretty grim'," wrote Erik Nielsen, group chief economist at UniCredit, in a note to clients.

Benchmark 10-year notes last fell 8/32 in price to yield 3.1056 percent, from 3.076 percent late on Friday.

U.S. crude fell 0.44 percent to $67.29 per barrel and Brent was last at $77.50, down 0.15 percent on the day.

(Reporting by David Randall; Editing by Susan Thomas)

This story has not been edited by Firstpost staff and is generated by auto-feed.


Updated Date: Oct 30, 2018 00:05 AM

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