GE earnings help extend Wall Street rally

Friday’s gains follow a rise in stocks on Thursday after lackluster economic data further eroded expectations that the Federal Reserve would raise interest rates this year from ultralow levels. “(The) report should be reassuring to markets which have been on edge over global disinflation risks”, strategists at BNP Paribas said in a note.

Also out overnight, the core consumer price index, which excludes food and energy costs, gained 0.2 percent in September after ticking up 0.1 percent in August, reviving a few bets that the U.S. Federal Reserve will deliver its first interest rate hike since 2006 as early as this year. Rekindled rate-hike expectations lifted the dollar.

Crude oil was 0.2 per cent higher at $US46.45 a barrel. The Malaysian ringgit slid from an eight-week high versus the dollar, leading currencies lower. USA futures were roughly flat, anticipating earnings from the likes of General Electric and Honeywell. Shares rose 3.4%. Separately, SunTrust Banks Inc. said loans and deposits grew and reported profit growth that on an adjusted basis beat expectations.

The main indexes were still on track to end a third straight week with gains, however.

Pharmaceutical stocks were another strong category, with Dow member Pfizer climbing 3.2 per cent, Biogen 4.5 per cent and Celgene 3.4 per cent. But Valeant Pharmaceuticals worldwide plunged 4.8 per cent on news it had been subpoenaed by United States prosecutors for information about its drug pricing decisions.

File – People are reflected in a board displaying market indices in Tokyo.

Wall Street continued to eye third-quarter earnings season, an important measure as it provides an updated read on the pace of economic growth, both at home and overseas, as reflected by company releases. However, the scales struggled to tip to the bulls’ side, as mixed economic data kept upside momentum in check.

Caterpillar Inc. (NYSE:CAT) paced the six laggards, dropping 1.6% as industrial stocks tanked.

“The medium-term prognosis is probably as weak as it has been since (ECB President Mario) Draghi started QE”, said Simon French, chief economist at Panmure Gordon, adding that recent euro strength had complicated his task further.

Bond prices fell. The yield on the 10-year US Treasury rose to 2.02 per cent from 1.98 per cent on Wednesday, while the 30-year advanced to 2.86 per cent from 2.84 per cent. Bond prices and yields move inversely.

The Sensex rose 0.8 per cent to 27,214.60 points at the close, after a rally in lenders in the final 90 minutes of the session helped the gauge cap a third week of gains, the longest winning streak since July 5.

Gold for immediate delivery was little changed at $1,182.45 an ounce, leaving its 2.3 per cent higher on the week. Brent added 0.9 per cent to $50.17.