Published: Tue, September 12, 2017
Money | By Oscar Reynolds

S&P sets record closing high as storm, North Korea fear fades

S&P sets record closing high as storm, North Korea fear fades

The greenback had retreated against major rivals for much of last week, and especially Friday, as natural disasters, geopolitical tensions and a continued pullback in Treasury yields cast a pall over the USA currency, with exchange rates for the Japanese yen, the euro and the pound at recent notable highs on their own fundamental drivers.

Irma pounded heavily populated areas of central Florida on Sunday, but gradually lost strength, weakening to a Category 1 hurricane overnight and is expected to weaken to a tropical storm during the day.

The U.S. and its allies had been bracing for another long-range missile launch to mark for the 69th anniversary of North Korea's founding on Saturday.

The Dow Jones Industrial Average .DJI rose 1.19 per cent to end at 22,057.37 points in its largest one-day gain since February.

Hurricane Irma, once a Category 5 hurricane, hit the coast of Florida over the weekend.

"The debt ceiling can being kicked down the road a few months is also providing temporary relief but as always with this kind of thing, the problem has only been delayed rather than resolved".

The S&P 500 financial index jumped 1.64%, with JPMorgan up 1.83% and insurer Travelers up 2.7%. The Nasdaq Composite Index rallied 1.1% at 6,432, was within range of its all-time closing high. The Russell 2000 index of smaller-company stocks added 13 points, or 0.9 percent, to 1,412.

The New Zealand dollar fell as fears around the USA dollar eased with the weakening strength of Hurricane Irma, the lack of further weapons testing by North Korea and less demand for safe havens such as the yen and gold.

US crude was trading 36 cents firmer at 47.84 dollars a barrel, while Brent rose 22 cents to 56.00 dollars.

"US equities are moving solidly higher in early action, with geopolitical concerns fading as North Korea held off on conducting another missile test, while early reports are suggesting downgraded Hurricane Irma's economic impact may be lower than feared, bolstering insurance stocks", said analysts at Charles Schwab brokerage.

"Insured losses (overall) are now expected to be less than many feared", Credit Suisse analysts said after the estimated insured loss in the United States resulting from Irma was cut to $20-40 billion. Travel site Priceline rose $19.28, or 1 percent, to $1,857.85. The U.S. 10-year Treasury TMUBMUSD10Y, +2.45% note rose to a yield of 2.10%, which helped to lift the dollar. Apple, which will unveil its newest iPhone on Tuesday, rose $2.36, or 1.5 percent, to $160.99 and Facebook rose $1.86, or 1.1 percent, to $172.81.

The two-year swap rate rose 2 basis points to 2.15 percent while the 10-year swaps rose 3 basis points to 3.05 percent.

The energy group climbed 0.5 percent despite weaker oil prices.

CURRENCIES: The dollar strengthened as the latest developments gave traders less reason to flee to the yen, traditionally considered a haven. The benchmark Nikkei 225 index in Japan jumped 1.4 percent as the yen came off recent highs against the dollar, easing pressure on exporters.

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