Stocks, sterling rise on long-awaited Brexit deal
By Marc Jones and Herbert Lash LONDON/NEW YORK (Reuters) - A deal on Britain's departure agreed with the European Union sent sterling to a five-month high on Thursday and hoisted European stocks to a year-and-a-half peak before doubts about UK parliamentary support hauled them back. Wall Street rose as upbeat earnings from Netflix and Morgan Stanley affirmed a strong start to the U.S
By Marc Jones and Herbert Lash
LONDON/NEW YORK (Reuters) - A deal on Britain's departure agreed with the European Union sent sterling to a five-month high on Thursday and hoisted European stocks to a year-and-a-half peak before doubts about UK parliamentary support hauled them back.
Wall Street rose as upbeat earnings from Netflix and Morgan Stanley affirmed a strong start to the U.S. reporting season while the dollar fell against the euro as the common currency got a lift on the long-awaited Brexit deal.
While the British government and the EU may have reached a deal, the road ahead is unclear. The Irish border riddle remains a sticking point for Northern Ireland's Democratic Unionist Party (DUP), which has withheld its backing.
That reduces the chances of British Prime Minister Boris Johnson winning parliamentary ratification at an extraordinary session of parliament on Saturday.
But after weeks of negotiations, an agreement being struck was welcomed by British and EU leaders.
"Where there is a will, there is a deal - we have one!" said European Commission President Jean-Claude Juncker as the news broke from Brussels.
Sterling, the key gauge of Brexit sentiment all along, jumped as much as a 1% against the dollar, putting it on course for its best six-day gain in more than 30 years before the doubts and grumbles set in.
Market optimism faltered when the Northern Ireland party said it could not support the agreement, torpedoing hopes of a smooth passage through parliament.
Having ran up as far as $1.2988
London's benchmark FTSE <.FTSE> index jumped 0.61% as the pound slid but the broad-market pan-European STOXX 600 <.STOXX> lost most of its gains, rising 0.17%. The FTSEurofirst index <.FTEU3> of leading regional shares rose 0.17%.
Earnings season is dictating U.S. market moves, which has historically been the case, said Kristina Hooper, chief global market strategist at Invesco.
"The buck stops with earnings," Hooper said. "The good news is most earnings reports thus far have been positive and that's provided some nice momentum for the market."
The Dow Jones Industrial Average <.DJI> rose 48 points, or 0.18%, to 27,049.98. The S&P 500 <.SPX> gained 10.07 points, or 0.34%, to 2,999.76 and the Nasdaq Composite <.IXIC> added 21.56 points, or 0.27%, to 8,145.74.
Emerging-market stocks <.MSCIEF> also gained for a sixth day - their longest winning streak since early April - after U.S. Treasury Secretary Steven Mnuchin said U.S. and Chinese trade negotiators were nailing down a Phase 1 trade deal text for their presidents to sign next month.
But U.S. retail sales fell for the first time in seven months, suggesting manufacturing-led weakness was spreading to the broader economy. U.S. consumption has been one of few bright spots in the global economy, so the data fanned concerns the trade war would ultimately tip the world into recession.
The dollar index <.DXY> fell 0.37%, with the euro
Oil prices fell as industry data showed a larger-than-expected increase in U.S. inventories, though the drop was limited by the Brexit deal.
(Reporting by Herbert Lash; Editing by Sonya Hepinstall)
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