Stocks around the world have enjoyed a strong first half to the week after finance ministers from the Group of 20 rich and developing countries indicated that borrowing costs would remain low for a while yet.
As a result, the Dow Jones industrial average has struck new highs for 2009.
Analysts said much could well depend on whether the S&P 500 – widely considered to be a better barometer of investor appetite than the Dow – can breach its October high of 1,097.
As a result, investors will be looking at earnings reports from a host of U.S. retailers this week, including Wal-Mart Stores Inc., Abercrombie & Fitch Co., Macy’s Inc. and JC Penney Inc. Without the help of the consumer, which accounts for around for 70 per cent of the U.S. economy, any global economic recovery will be modest.
Wall Street was poised for a solid opening later, though trading was likely to be light, with government debt markets closed for Veterans Day.
European stock markets rose Wednesday, helped by strong earnings from French bank Credit Agricole SA and a surprise increase in British employment levels.
The euro meanwhile was pushing back up towards 15-month highs against the dollar while the pound slid over a cent and a half after Bank of England governor Mervyn King said a fall in the value of the currency was necessary to rebalance the British economy.
British labour market figures showed that employment actually increased in the three months to September, the first rise since May 2008 – an increase in the available work force, as graduates joined the labour market, also pushed unemployment up, however.
Oil firmed above $79 as a 15-month low in the dollar diverted investors’ focus from fundamentals, with weekly U.S. government inventory data being delayed by one day to Thursday.
Analysts said strong Chinese oil demand and factory output also supported the market but the gain was capped by weak demand elsewhere and a relatively quick recovery of the U.S. oil industry after storm disruption.
Gold was moving higher Wednesday morning and was at $1,115.20 at 6:50 a.m. ET.
