Wall Street hits new highs; oil surges on supply worries

Hilary Russ, Reuters

Posted at Oct 17 2017 08:20 AM

NEW YORK - Wall Street closed at record highs, the dollar edged up and copper touched a 3-year peak on Monday as upbeat Chinese data drove optimism about the world's second-biggest economy, while oil prices jumped due to supply worries after Iraqi forces seized the oil-rich city of Kirkuk from Kurdish fighters.

Asian shares rallied to a decade high after figures showed China's producer prices beat market expectations, rising 6.9 percent in September from a year earlier.

Major US stock indexes rose to record high closes as banking stocks recovered from last week's losses, with the S&P financial index posting its first gain in 4 days. Energy stocks rose on higher oil prices and technology shares also rallied, driven by a 1.6 percent increase in Apple Inc .

Wall Street's rise comes ahead of a barrage of quarterly earnings reports this week.

"The market is going higher despite all the news flow of geopolitical events," said Jeff Zipper, managing director at US Bank Private Client Reserve in Palm Beach, Florida. "There is optimism on earnings, economic indicators and hopes of budget resolution."

The Dow Jones Industrial Average rose 85.24 points, or 0.37 percent, to 22,956.96, the S&P 500 gained 4.47 points, or 0.18 percent, to 2,557.64 and the Nasdaq Composite added 18.20 points, or 0.28 percent, to 6,624.01.

In China, upbeat data came before the Communist Party Congress on Wednesday and third-quarter economic data on Thursday.

MSCI's broadest index of Asia-Pacific shares outside Japan closed up 0.57 percent at its highest level since late 2007.

"What has helped risk appetite this morning is that the Chinese inflation data suggests the world's second biggest economy is doing much better than people expected this time a year ago for 2017," said Michael Hewson, chief markets analyst at CMC Markets.

Japan's Nikkei climbed 0.47 percent to a level not seen since late 1996.

Traders said that belief that Japan's ruling party bloc would win the general election later this month continued to underpin market sentiment, and a weaker yen raised hopes that Japanese companies would report strong earnings.

MSCI's gauge of stocks across the globe gained 0.09 percent. Emerging market stocks rose 0.49 percent.

Copper jumped 3.7 percent to $7,134 per ton on the London Metal Exchange, after touching the July 2014 high of $7,177 a tonne, driven by economic data from China, the world's top copper consumer.

Prices are up about 29 percent year to date, on track for the biggest annual gain since 2010.

Oil prices rose after Iraqi forces entered Kirkuk, briefly cutting some crude output from OPEC's second-biggest producer.

US crude rose 0.82 percent to $51.87 per barrel and Brent was last at $57.86, up 1.21 percent on the day.

The euro weakened after the Austrian election put conservative Sebastian Kurz on track to become the next leader. He is seen as likely to seek a coalition with the resurgent far right because his party is far short of a majority.

The euro slumped 0.25 percent to $1.1792, while the dollar index added to gains, rising 0.21 percent as investors repositioned following disappointing inflation data on Friday that sent the greenback lower.

Spanish stocks lagged Europe after Catalan leader Carles Puigdemont failed to clarify whether he had declared independence from Spain last week, possibly paving the way for the central government to take control of the wealthy region.

Spain's country index IBEX fell 0.75 percent, compared to the pan-European FTSEurofirst 300 index, which ticked up 0.04 percent.