Name Symbol Market Type
FTSE 100 Index FTSE:UKX FTSE Indices Index
  Price Change % Change Price High Price Low Price Open Price Traded Last Trade
  -135.70 -1.93% 6,906.77 7,042.47 6,851.87 7,042.47 0 12:08:07

Stocks Open Higher on Optimism About Economy

24/01/2020 3:02pm

Dow Jones News

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By Avantika Chilkoti 

U.S. share benchmarks perked up in early New York trading after European stocks rose Friday in response to fresh economic data that signaled a halt to the slowdown in the German manufacturing sector.

The Dow Jones Industrial Average picked up 111 points, or 0.4%, while the Nasdaq Composite Index added 0.5% and the S&P 500 gained 0.2%.

Earlier, the pan-continental Stoxx Europe 600 index gained 1.2%.

Preliminary data on purchasing managers' indexes, closely watched measures of business activity, suggested that the manufacturing sector in the eurozone -- and Germany, in particular -- fared better than the market had expected in January. Factories in the region saw export orders begin to stabilize after a long and deep decline, and while the manufacturing sector continued to contract, it was at a slower pace than previous months.

"The markets are reacting to the signs of bottoming in German manufacturing," said Mike Bell, global market strategist at J.P. Morgan Asset Management. "It's pretty key because the big question on everyone's mind has been: is there recession risk? And the most obvious risk there was a downturn in European manufacturing."

Ahead of the opening bell in New York, shares in Intel rose almost 5%. On Thursday, the giant chip maker reported fourth-quarter earnings that beat expectations following an upswing in personal-computer shipments and robust demand for chips to power data centers.

Rival chip maker Broadcom gained 2.5% in offhours trading after the company said Thursday that it had secured multiyear supply agreements to provide wireless components for Apple products.

Within European equities, Ipsen plunged over 21% after the French biopharmaceutical company paused trials on a drug for ultrarare bone diseases, and said it is evaluating the implications on its 2022 financial outlook. Rémy Cointreau retreated more than 9% in Paris after the beverages maker reported disappointing sales.

Shares in Ericsson dropped 5.3% after higher costs weighed on the telecommunications equipment company's latest earnings, and it said expenses will continue to rise this year.

Meanwhile, Carrefour rose 5.5% after the French retailer boosted its guidance for 2019 earnings, exceeding investors' expectations.

U.K. stocks also rose, with the FTSE 100 index climbing 1.6% after the latest purchasing managers index data was better than analysts expected.

The readings are "the surest sign yet that the economy has turned a corner since the election," and would likely mean the Bank of England holds off cutting rates later this month, analysts at Capital Economics said in a note.

Over in Asia, Japan's Nikkei 225 benchmark closed up 0.1% and Hong Kong's Hang Seng finished the day up almost 0.2%. Chinese and Korean markets were closed for public holidays.

Later in the day, IHS Markit is scheduled to publish the latest PMI data for the U.S., which may show very modest slowdowns in the manufacturing and services sectors while remaining in expansion territory.

Write to Avantika Chilkoti at


(END) Dow Jones Newswires

January 24, 2020 09:47 ET (14:47 GMT)

Copyright (c) 2020 Dow Jones & Company, Inc.

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