Global stocks edge up as pound seesaws over Trump comments

Investors hopeful China, US can still settle their tariffs war

NEW YORK, July 14, (Agencies): US and European stocks rose modestly on Friday with investors mildly hopeful that China and the US can still settle their war over tariffs.

On currency markets, the pound slumped after US President Donald Trump attacked UK Prime Minister Theresa May’s Brexit strategy but recovered after he seemed to backtrack later in the day.

Equities have had a rollercoaster week, with strong US jobs figures providing support before Trump threatened tariffs on another $200 billion of Chinese imports, causing a large sell-off.

The markets have also been buoyed by optimism over second-quarter earnings.

Still, analysts are cautious about the odds that the global economy will skirt a value-destroying trade war, with Barclays warning Friday that “the market’s benign narrative of this having limited economic consequence could become challenged as trade cost effects cascade through global value chains.”

Beijing’s measured response to Trump’s midweek tariffs threat and indications from both sides that they are willing to talk has instilled trading floors with a little optimism heading into the weekend.

On currency markets Friday, sterling was hammered early in the session by fresh concerns about May’s political future.

US stocks rose slightly on Friday, putting the S&P 500 at its highest closing level in more than five months, as gains in industrials and other areas offset a drop in financials after results from three of the big banks mostly disappointed.

The industrial sector gained 0.6 percent, with Boeing Co, Caterpillar Inc and 3M Co all rose in the absence of any trade rhetoric overnight.

Investors were optimistic ahead of what is expected to be a strong secondquarter US earnings season, although reports on Friday from three of the biggest Wall Street banks failed to enthuse.

Earnings “expectations are certainly elevated from where they were a month ago, but if companies do deliver in general, the market as a whole will continue to move higher,” he said.

Citigroup Inc slid 2.2 percent, the most among financials, after its revenue fell short of estimates due to lower debt underwriting. Wells Fargo & Co dipped 1.2 percent after its profit fell more than expected as lending slowed and costs rose.

JPMorgan Chase & Co shares were down 0.5 percent although the bank’s profit beat estimates. The financial index fell 0.5 percent.

The CBOE Volatility Index closed at its lowest level since June 15.

The Dow Jones Industrial Average rose 94.52 points, or 0.38 percent, to 25,019.41, the S&P 500 gained 3.02 points, or 0.11 percent, to 2,801.31

and the Nasdaq Composite added 2.06 points, or 0.03 percent, to 7,825.98.

The S&P 500 posted its highest closing level since Feb 1.

The index is now just 2.5 percent from its Jan. 26 record closing high and up 4.8 percent for the year so far.

Netflix Inc sank 4.3 percent after Deutsche Bank warned the company could fall short of subscriber growth numbers when it reports results on Monday.

Johnson & Johnson dropped 1.4 percent after a jury ordered it to pay a record $4.69 billion to 22 women who alleged its talc-based products contain asbestos and caused them to develop ovarian cancer.

AT&T Inc’s shares fell 1.7 percent on the US Justice Department’s plan to appeal a federal judge’s approval of the

company’s already closed $85.4 billion acquisition of Time Warner.

Advancing issues outnumbered declining ones on the NYSE by a 1.01to-1 ratio; on Nasdaq, a 1.22-to-1 ratio favored decliners.

The S&P 500 posted 38 new 52week highs and 2 new lows; the Nasdaq Composite recorded 93 new highs and 40 new lows.

Trading volume was among the lowest of the year, with about 5.3 billion shares changing hands on US exchanges. That compares with the 6.6 billion daily average for the past 20 trading days, according to Thomson Reuters data.

Britain’s top share index ended off earlier highs on Friday, as the pound recovered after Donald Trump said he looked forward to finalising a postBrexit

trade deal with Britain.

The US President’s remarks curbed gains for the FTSE to 0.1 percent. The index, which is heavy on companies with foreign currency revenues, was earlier up as much as 0.8 percent after a Trump interview that appeared to dismiss hopes of a US-British trade deal, depressing the pound.

As sterling reduced its losses, the FTSE’s dollar-earnings constituents such as consumer stocks Diageo, British American Tobacco and Unilever came off highs. BAT and Unilever ended little changed.

For the week, the FTSE rose 0.6 percent.

While the corporate earnings season has yet to get properly under way in Europe, a few British companies saw their shares move on the back of updates.