U.S. stocks erased early losses and push higher as investors focused on positive earnings results from companies ranging from Microsoft to Honeywell and downplayed the latest verbal salvos from President Donald Trump in an escalating trade war. The TSX, however, still remained in the red at midday.
The U.S. dollar slumped by the most since May after Trump said he’s “ready to go” with additional import tariffs and that China, the European Union and others have been manipulating their currencies and interest rates. Yields on Treasuries were mostly higher as Trump doubled down on comments that he’s unhappy with the Federal Reserve tightening after the administration has worked so hard to grow the economy.
“If you step back and look at how strong the market’s been, in my mind it’s all earnings driven,” said Gary Bradshaw, senior vice president of First Dallas Securities. “You look at earnings that have come out and they’ve been great, Microsoft last night as an example.”
Trump’s latest move in the trade war with China came as investors try to gauge the ability of the Asian nation’s economy -- the world’s second-biggest -- to withstand a protectionist showdown. The yuan may be a key tool in China’s response to Trump, who continues to y express dissatisfaction with America’s own monetary policy as his country’s currency strengthens.
Elsewhere, WTI crude nudged higher, while most base metals also advanced. Emerging market equities climbed.
The S&P 500 Index gained 0.1 percent as of 11:39 a.m. in New York. The Dow Jones Industrial Average rose 0.2 percent. The Nasdaq Composite Index rose 0.4 percent. The U.K.’s FTSE 100 Index was little changed. The MSCI Emerging Market Index gained 1.1 percent. The Stoxx Europe 600 Index fell 0.1 percent.
The S&P/TSX Composite index, meanwhile, was down 70.36 points, or 0.4 per cent, at 16.472. Enbridge and TransCanada were among the biggest drags, both down 2 per cent or more, paring their gains on Thursday that were inspired by a favourable decision by energy regulators in the U.S. that pertain to the taxation of U.S. pipeline operations. The ultimate impact on the decision on pipeline companies is still somewhat unclear.
The yield on 10-year Treasuries rose five basis points to 2.88 percent. Italian 10-year yields increased seven basis points to 2.58 percent. Germany’s 10-year yield rose four basis points to 0.37 percent.
West Texas Intermediate crude rose for a fifth day, climbing 0.6 percent to $69.86 a barrel. Gold increased for the first time in six trading sessions, climbing 0.4 percent to $1,228.11 an ounce.
The Canadian dollar was up almost a full cent on the day, to 76.16 cents (U.S.), due to the slide in the greenback as well as data this morning suggesting inflation was heating up in Canada.
With files from Reuters, Bloomberg and The Globe and Mail