By Caroline Valetkevitch
NEW YORK (Reuters) -Major stock indexes edged higher on Tuesday after upbeat results and forecasts from some top U.S. companies, while the yen fell to a one-week low after conservative Sanae Takaichi was elected as Japan’s prime minister.
Gold prices were on track for the steepest daily fall in five years as investors took profits after recent sharp gains. Spot gold fell 5.44% to $4,118.49 an ounce.
U.S. President Donald Trump said he expected to reach a fair trade deal with Chinese President Xi Jinping when the two meet next week in South Korea, and played down the risks of a clash over the issue of Taiwan.
The prospect of a resolution also helped bolster investor sentiment, along with a deal between Australia and the United States for the supply of rare earth materials.
In earnings, GM shares jumped after the company raised full-year forecast, and Coca-Cola gained after the company posted results that beat analysts’ estimates.
But investors were still worried about a pullback in stocks after recent record highs.
“I do think we’re going to get a little bit of a pullback before the year-end rally and maybe it’ll be triggered by tech earnings, maybe something with China-Trump, maybe geopolitical,” said Thomas Hayes, chairman at Great Hill Capital LLC.
The Dow Jones Industrial Average rose 347.74 points, or 0.74%, to 47,054.32, the S&P 500 rose 14.96 points, or 0.22%, to 6,750.09 and the Nasdaq Composite rose 15.88 points, or 0.07%, to 23,006.42.
MSCI’s gauge of stocks across the globe rose 0.67 points, or 0.07%, to 996.36.The pan-European STOXX 600 index rose 0.21%.
Earlier, Japan’s Nikkei share gauge closed at a record high.
Traders bet that Takaichi’s government could muddy the interest rate outlook and bring about greater fiscal spending.
The dollar also rose against other currencies besides the yen. The dollar index, which measures the greenback against a basket of currencies including the yen and the euro, rose 0.25% to 98.86, with the euro down 0.21% at $1.1615. Against the Japanese yen, the dollar was last up 0.74% at 151.86.
U.S. Treasury yields eased as investors looked ahead to the Federal Reserve’s next moves.
The Fed could deliver as many as three rate cuts in the next six months, based on market-based expectations, while the ECB, which meets next week, is not expected to deliver a rate cut any time soon.
The yield on benchmark U.S. 10-year notes fell 2.7 basis points to 3.961%, from 3.988% late on Monday.
Investor confidence was hit hard last week as a clutch of bad loans at U.S. regional banks ignited concern over credit risks that threatened to spill into the broader markets. The prolonged U.S. government shutdown also weighed on risk assets.
U.S. crude rose 0.83% to $58.00 a barrel and Brent rose to $61.59 per barrel, up 0.95% on the day.
(Reporting by Caroline Valetkevitch; additional reporting by Amanda Cooper in London and Pranav Kashyap and Twesha Dikshit in Bengaluru; Editing by Peter Graff and Nick Zieminski)
