Sterling up after May wins confidence vote; stocks climb

Sterling up after May wins confidence vote; stocks climb

By Caroline Valetkevitch

NEW YORK (Reuters) - Major world stock indexes rose on Wednesday, with the S&P 500 supported by sharply higher U.S. bank shares after strong earnings, while the pound was up after British Prime Minister Theresa May's government won a confidence vote in parliament.

That should allow her to attempt to create a consensus among lawmakers on an agreement on Britain's departure from the European Union. The confidence vote followed the parliamentary defeat of May's Brexit deal late Tuesday.

Expectations of a softer Brexit - perhaps incorporating the Labour Party's idea of membership of a permanent customs union - gave some support to the pound.

Sterling was last trading at $1.2873, up 0.12 percent on the day.

Stocks mostly shrugged off the results of the vote. MSCI's gauge of stocks across the globe <.MIWD00000PUS> gained 0.39 percent.

On Wall Street, strong earnings from Bank of America and Goldman Sachs helped to keep stocks in positive territory. Bank of America shares were up more than 7 percent while Goldman's stock was up about 8 percent.

"There is hope for this earnings season, and Goldman Sachs and Bank of America have got it started off on the right foot," said Jake Dollarhide, chief executive officer at Longbow Asset Management in Tulsa, Oklahoma.

The Dow Jones Industrial Average <.DJI> rose 218.87 points, or 0.91 percent, to 24,284.46, the S&P 500 <.SPX> gained 15.34 points, or 0.59 percent, to 2,625.64 and the Nasdaq Composite <.IXIC> added 32.57 points, or 0.46 percent, to 7,056.40.

The pan-European STOXX 600 index <.STOXX> rose 0.54 percent.

The dollar rose against the euro as the euro zone single currency was pushed lower by worries about the zone's economy, with the euro down 0.12 percent to $1.14.

Earlier this week, data showed Germany barely escaped a recession in the second half of 2018 and European Central Bank chief Mario Draghi warned on Tuesday the euro zone economy was weaker than anticipated.

In sovereign debt markets, British government bonds underperformed versus German peers in early trade.

U.S. Treasury yields rose as stronger-than-forecast results from two major banks lifted Wall Street, reducing safe-haven demand for U.S. government debt.

Benchmark 10-year notes last fell 7/32 in price to yield 2.7326 percent, from 2.708 percent late on Tuesday.

Oil prices gained, with data showing growing U.S. refined product inventories and record crude production.

U.S. West Texas Intermediate (WTI) crude futures rose 0.4 percent to settle at $52.31 a barrel.

(Additional reporting by Tom Wilson in London and Medha Singh in Bengaluru; Editing by Mark Heinrich and James Dalgleish)

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

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Updated Date: Jan 17, 2019 02:05:22 IST

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