US stocks end mildly positive in choppy trade

The MSCI global stock index ended Wednesday's choppy trading session with a small gain as worries over US politics, global economic growth and trade tensions were countered by a boost from quarterly earnings reports. However, the US dollar and oil prices declined.

US Treasury yields climbed but analysts expect the $15.6-trillion market to be confined within a tight trading range due to a dearth of fresh economic data amid the longest-ever US government shutdown.

The US dollar edged lower against a basket of currencies as uncertainty over trade and the global economy clouded the greenback's near-term outlook and restricted it to tight trading ranges against other major currencies.

“The trade conflicts and tensions, the (US government) shutdown and certainly more chatter about global growth in 2019, those are the factors that need to be hashed out before we get a clear direction,” said Minh Trang, senior currency trader at Silicon Valley Bank in Santa Clara, California.

After falling more than 1 per cent in the previous day's session, Wall Street indexes zig-zagged.

Strong quarterly reports from Procter & Gamble, Comcast Corp and International Business Machines helped the Dow show the biggest gains of the day.

But US political uncertainty weighed heavily on investors.

White House economic adviser Kevin Hassett said in a CNN interview the US could see zero growth in the first three months if the partial government shutdown is extended for the whole quarter.

“What we're seeing here is a very indecisive market and a market that's very sensitive to headline news on trade and the shutdown,” Peter Cardillo, chief market economist at Spartan Capital Securities in New York referring to Hassett's comment.

And, according to Cardillo, it didn't help investor mood that US President Donald Trump and US House of Representatives Speaker Nancy Pelosi argued publicly over whether Trump can deliver the annual State of the Union address in the House chamber during the shutdown.

“The longer the bickering goes on, the longer the shutdown goes on and everyone gets affected if the economy slows,” he said.

The Dow Jones Industrial Average rose 171.14 points, or 0.7 per cent, to 24,575.62, the S&P 500 gained 5.8 points, or 0.22 per cent, to 2,638.7 and the Nasdaq Composite added 5.41 points, or 0.08 per cent, to 7,025.77.

MSCI's gauge of stocks across the globe rose 0.1 per cent, after the pan-European STOXX 600 index lost 0.06 per cent.

Investors also kept a close eye on China on hopes more economic stimulus measures would ease worries over slow progress in trade talks between Washington and Beijing.

Trump told presspersons on Wednesday the US was doing well in trade talks and that China “very much wants to make a deal.”

The day before his advisers had said he would not soften his position that Beijing must make real structural reforms, including how it handles intellectual property, to reach a trade deal.

“The market is shadow-boxing with speculation about trade,” said Ward McCarthy, chief financial economist at Jefferies & Co. in New York.

The dollar index, which tracks the greenback versus the euro, yen, sterling and three other currencies, was down 0.2 per cent at 96.127. The index has risen nearly 1 per cent over the last two weeks.

The greenback was up 0.22 per cent against the yen after the Bank of Japan on Wednesday kept its stimulus programme in place.

Benchmark 10-year notes last fell 4/32 in price to yield 2.7462 per cent, from 2.732 per cent late on Tuesday.

Oil prices slipped as the European Union sought to circumvent US trade sanctions against Iran and on weaker US gasoline prices.

US crude settled down 0.74 per cent or 39 cents at $52.62 per barrel. Brent crude futures settled at $61.14 per barrel, down 36 cents, or 0.59 per cent.

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