Dow Climbs Back Above 22000 as Fears Ease

Ivan Schwartz
September 13, 2017

A global equity index and the S&P 500 surged to record highs on Monday, spurred by relief that Hurricane Irma weakened to a tropical storm and that North Korea's anniversary celebrations on the weekend passed without a new missile test.

USA equity benchmarks ended Friday, 8 September 2017, on a mixed note, with both the S&P 500 and the Nasdaq Composite in the red but the Dow Jones Industrial Average slightly higher as Hurricane Irma made landfall in Florida over the weekend.

The S&P 500 financial index.SPSY jumped 1.74 percent, with JPMorgan (JPM.N) up 2.18 percent and insurer Travelers (TRV.N) up 2.34 percent. The Russell 2000 index of smaller-company stocks added 15.40 points, or 1.1%, to 1,414.83. The yuan has gained 6.8 percent so far this year, having more than made up the almost 6.6 percent drop it suffered in 2016.

In Europe, Germany's DAX was up 1.1 percent at 12,435 while the CAC 40 in France rose 1.1 percent to 5,167.

Some analysts had expected North Korea to conduct a weapons test on Saturday, coinciding with the country's founding day, as it did a year ago to mark the celebration. Meanwhile, Irma made landfall on Sunday as a Category 3 hurricane on the west coast of Florida.

Gold prices continued to drift lower late in United States trading on Friday as the USA currency recovered from its worst levels, although prices closed just above $1,345 per ounce.

"Indices, which have been in consolidation over the last month or so, are now expected to enjoy a mini relief rally although we should get interesting insight into just how much investors perceive the threat of an escalation to have subsided".

"The major determinant of gold last week was actually geopolitical tensions, but over the weekend, we did not see any crisis triggering event so we're going to have less chances for gold prices in the upward direction", said Mark To, head of research at Hong Kong's Wing Fung Financial Group.

Asian Shares Rise As Korea Tensions Ease

"The dollar index has bounced back up from its two years lows purely because the estimates of economic damage [from Hurricane Irma] are far less than anticipated", said Naeem Aslam, chief market analyst at Think Markets.

The 10-year U.S. Treasury note US10YT=RR last fell 21/32 in price to yield 2.134 percent, up from 2.061 percent late on Friday.

Gold, another traditional haven for money managers, fell 1.1%.

In another sign investors were willing to take more risks, gold lost 15.50 dollars, or 1.1%, to 1,335.70 dollars an ounce.

Eldorado Gold Corp slumped 4.4 per cent to $2.38 after the company said it was suspending its Greek mining investment, citing regulatory hurdles.

The euro edged higher against the dollar at $1.1970 in early trades.

The dollar was able to gain fresh traction in early United States trading as relief dominated markets and gold retreated to the $1,332 per ounce area as USD/JPY strengthened to highs above 108.70.

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The federal government said another 390 passengers were brought back to Canada over the weekend. Both have family who live there.

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