NEW YORK/LONDON – A rally in global equity markets lifted stocks in Europe to record highs on Friday amid strong corporate earnings and hopes central bank interest rate cuts are near, while the dollar edged higher despite signs of slowing US economic growth.
European shares posted their biggest weekly gain since late January, with the pan-regional STOXX 600 index rising for a sixth straight session, while the FTSE 100 in London hit yet another record high.
The Dow industrials index registered its eighth daily advance as the three major Wall Street indexes posted weekly gains but the Nasdaq closed marginally lower on the day.
Strong performance on both sides of the Atlantic, along with gains overnight in Tokyo and elsewhere in Asia, pushed MSCI’s all-country world index within 0.2 percent of a record closing high.
US equity markets took comfort from earning season as corporate results in aggregate beat expectations, said Dec Mullarkey, managing director of investment strategy and asset allocation at SLC Management in Boston.
“It certainly gave some assurance that growth is holding up while companies protect profit margins,” Mullarkey said, referring to corporate America.
While in Europe, “the prospect of rate cuts is helping drive equity markets across the euro zone as it still looks like a decent value play to global asset allocators,” he said.
The pan-European STOXX 600 index closed up 0.77 percent, the FTSE ended 0.63 percent higher and MSCI’s gauge of stocks across the globe rose 0.31 percent – just 0.2 percent from a new closing high.
The Dow Jones Industrial Average rose 0.32 percent, the S&P 500 gained 0.17 percent and the Nasdaq Composite eased 0.03 percent.
The dollar pared initial declines and turned modestly higher as investors assessed a reading on US consumer sentiment and sifted through a flurry of comments from Fed officials.
