U.S. Stocks Open Higher as a Weaker Dollar Boosts Copper and Crude Oil
U.S. stocks opened higher on Thursday as the dollar slid further, boosting oil and copper. Crude oil inched up to over $33 a barrel amid speculation that weak global growth may prevent the central bank from tightening further. Commodities producers helped push U.S. stocks higher as a result.
The Dollar Spot Index is heading for one of the biggest today losses in seven years. U.S. oil climbed 3%, and metals advanced.
The S&P 500 saw gains for the second day in a row, as Freeport-McMoRan Inc. (FCX), led the gains, soaring 24%.
Meanwhile, emerging-market equities saw gains. The pound slid after Ian McCafferty withdrew his call for higher interest rates.
New data on the U.S. service sector showed that growth was at its slowest pace in nearly 2 years, which dragged the dollar down. The dollar’s decline helped to boost industrial metals and crude prices.
In morning trading, the S&P 500 was up 0.5% to 1922. The index experienced its second day of advances for the first time in February, but is still down 6% so far this year.
Materials shares gained 3%, while energy producers added over 1%. Consumer-discretionary stocks tumbled. Kohl’s Corp (KSS) plummeted 13% after releasing disappointing results. Ralph Lauren Corp. (RL) sank after the company reduced its annual forecast.
Initial jobless claims rose more than expected last week, according to Labor Department data. Factory orders also declined at a faster-than-expected pace in the month of December.
In other markets, the Stoxx Europe 600 Index tumbled 0.8% soon after gaining as much is 1.1%. Daimler AG (ETR: DAI) led the decliners. Commodity producers and energy shares were up 2%.
The MSCI emerging markets Index gained 2.6%. Energy producers experienced the largest gains, inching up over 4%.
In the currencies markets, the dollar retreated 0.7% after slipping 1.9% the previous session. The greenback slid against all 16 major currencies aside from the pound, which was dragged down by the BOE’s decision to keep interest rates unchanged.
West Texas intermediate jumped 1.7% to trade at $32.82 a barrel after falling as much is 1.7%. Industrial metals benefited from a weaker dollar. Aluminum climbed to its highest rate this year, and lead saw gains for the eighth straight day. Spot gold was up for the fifth day in a row, its longest run of gains in over five months.
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