US stocks gain again but European bourses retreat

On the defensive

Wall Street stocks finished higher for a second session in a row on Monday on improved investor sentiment, while European bourses fell modestly on profit-taking.

The US gains came amid continued relief after Federal Reserve Chair Jerome Powell on Friday signaled a more cautious approach to further interest rate increases.

Some analysts also attributed the gains to optimism at the resumption of trade talks between mid-level US and Chinese officials.

US stocks spent much of December in retreat amid worries over trade wars, higher Federal Reserve interest rates and slowing global growth.

"It seems as though investor sentiment or psychology just got too negative," said Jack Ablin of Cresset Wealth Advisors.

"Now the news has not been quite as bad as people feared. If we can continue the rally a little bit more, the earnings season should be actually very favorable news for investors."

Analysts expect companies in the S&P 500 to report earnings growth of 11.4 percent for the fourth quarter, down from 25 percent reported in the previous three quarters, according to FactSet.

Briefing.com noted that US stocks pulled back from session peaks early in the afternoon after President Donald Trump announced plans for a Tuesday night address on the border impasse, the core issue of a US government shutdown that is now in its third week.

"Nevertheless, selling didn't gain much traction," Briefing.com analyst said.

All three major US indices advanced, with the Nasdaq climbing the most as Amazon surged ahead of Microsoft to become the biggest company by market capitalization.

Asian markets also pushed higher, with Japan's Nikkei climbing 2.4 percent.

But European markets gave back some of Friday's advance.

"Stocks are still not out of the woods", said Fawad Razaqzada, a market analyst at Forex.com.

If the forthcoming fourth quarter earnings season in the US produces "more misses than beats then the selling pressure could resume again," he said.

Analysts also expressed skepticism over the trade talks.

"Realistically we are unlikely to see any form of tangible breakthrough in the immediate future, with issues such as the protection of intellectual property rights providing a major stumbling block that needs to be overcome," said Joshua Mahony, senior market analyst at IG.

- Key figures around 2200 GMT -

New York - Dow: UP 0.4 percent at 23,531.35 (close)

New York - S&P 500: UP 0.7 percent at 2,549.69 (close)

New York - Nasdaq: UP 1.3 percent at 6,823.47 (close)

London - FTSE 100: DOWN 0.4 percent at 6,810.88 (close)

Frankfurt - DAX 30: DOWN 0.2 percent at 10,747.81 (close)

Paris - CAC 40: DOWN 0.4 percent at 4,719.17 (close)

EURO STOXX 50: DOWN 0.3 percent at 3,033.64 (close)

Tokyo - Nikkei 225: UP 2.4 percent at 20,038.97 (close)

Hong Kong - Hang Seng: UP 0.8 percent at 25,835.70 (close)

Shanghai - Composite: UP 0.7 percent at 2,533.09 (close)

Dollar/yen: UP at 108.74 yen from 108.51 at 2200 GMT Friday

Euro/dollar: UP at $1.1472 from $1.1395

Pound/dollar: UP at $1.2769 from $1.2723

Oil - Brent Crude: UP 27 cents at $57.33 per barrel

Oil - West Texas Intermediate: UP 56 cents at $48.52 per barrel

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