Economy

S&P 500 chalks up record high as fear-gauge drops

S&P 500 chalks up record high as fear-gauge drops”

Wall Street futures pointed to a higher open on Monday as the weekend passed with no heightening of tensions over North Korea, allowing risk appetite to return to markets, and Hurricane Irma weakened considerably, suggesting that damage may not be as dire as feared.

"Some people said the dollar's fall and recovery was not odd, since US yields got so low", said Masashi Murata, currency strategist for Brown Brothers Harriman in Tokyo.

The powerful storm made landfall in South Florida on Sunday morning after rolling through the Caribbean.

- The Stoxx Europe 600 Index jumped 1 percent to the highest in a month.

Tensions between the USA and North Korea have been on investors' minds recently, and on Monday global markets advanced as the situation didn't get any worse. US stocks were poised for a solid opening with Dow futures and the broader S&P 500 futures 0.5 percent higher. All 11 major S&P sectors rose, led by gains in technology and financial stocks.

Shares of USA and European insurers rose, with companies particularly exposed to Florida posting sharp gains as the losses from Irma were seen as less severe than feared. South Korea's Kospi advanced 0.7 percent to 2,359.08, Hong Kong's Hang Seng added 1 percent to 27,955.49, and the Shanghai Composite in mainland China rose 0.3 percent to 3,376.42.

Investors were relieved as Irma, which is still deluging Florida and Georgia, didn't appear to be as bad as it did in projections last week.

US crude futures traded up 0.61% to $47.77 by 6:47AM ET (10:47GMT), while Brent oil lost 0.35% to $53.59.

HCI Group jumped $5.28, or 17.2 percent, to $36.05 while Heritage Insurance gained $2.14, or 22.8 percent, to $11.51.

Benchmark U.S. crude rose 59 cents, or 1.2 percent, to $48.07 a barrel in NY while Brent crude, used to price global oils, added 6 cents to $53.84 a barrel in London. The FTSE 100 index of leading British shares was 0.3 percent higher at 7,401. MSCI's emerging markets index rose 0.73 percent.

"Receding fear over Hurricane Irma and North Korea was a key factor behind the dollar's bounce". XL Group advanced $2.15, or 5.6 percent, to $40.76 and Travelers gained $2.99, or 2.5 percent, to $122.75. Travel booking site Priceline rose $24.61, or 1.3 percent, to $1,863.18.

Investors are so focused on the hurricane and the Federal Reserve's potential monetary tightening that they are missing the enormous boost the weaker dollar and low interest rates will give the US economy, said Jim Paulsen, chief investment strategist at the Leuthold Group in Minneapolis.

Germany's benchmark 10-year bond yield pulled further away from recent 2-1/2 month lows and yields on benchmark U.S. Treasury debt rose from 10-month lows.

- Britain's 10-year yield increased five basis points to 1.04 percent.

Oil prices rose as the upward pressure from USA refinery restarts and Saudi talks to extend production cuts outweighed demand fears driven by Irma's continued pounding of Florida.

Saudi Arabia's Energy Minister Khalid al-Falih met his Venezuelan and Kazakh counterparts at the weekend to discuss an extension of the deal by at least three months, the Saudi energy ministry said.

Brent crude oil futures for November delivery settled up 6 cents at $53.84 a barrel, while benchmark U.S. West Texas Intermediate crude rose by 59 cents to $48.07.

1 percent, to $158.08 and Lowe's declined 87 cents, or 1.1 percent, to $77.69. Silver fell 22 cents, or 1.2 percent, to $17.90 an ounce.



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