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Global stocks edge up after U.S. tax plan, Powell nomination; sterling drops
November 2, 2017 / 12:42 AM / 23 days ago

Global stocks edge up after U.S. tax plan, Powell nomination; sterling drops

NEW YORK (Reuters) - World stock markets edged higher on Thursday, with Wall Street up slightly and the U.S. dollar modestly weaker after details of a Republican tax plan were released and the nomination of Jerome Powell as the new head of the Federal Reserve.

FILE PHOTO: The New York Stock Exchange (NYSE) is pictured in New York City, New York, U.S., August 2, 2017. REUTERS/Carlo Allegri/File Photo

The Republican tax plan called for broad changes to the U.S. tax code, including slashing the corporate tax rate and reducing the number of tax brackets for individuals.

“Everyone knows it is a long shot, there is not a bunch of money trying to get ahead of this,” said Phil Blancato, CEO of Ladenberg Thalmann Asset Management in New York.

“Unfortunately, I don’t think anyone believes this is going to go through; it is a wait and see opportunity.”

President Donald Trump tapped Fed Governor Jerome Powell to become head of the U.S. central bank, promoting a soft-spoken centrist to replace Janet Yellen when her term expires in February 2018.

Hopes for progress on tax reform and a solid earnings season helped push the S&P 500 up 2.2 percent in October. Apple (AAPL.O), the largest U.S. company by market capitalization, will report results after the market close.

According to Thomson Reuters data, of the 384 companies that have reported earnings, 72.7 percent have topped Wall Street expectations, compared with a beat rate of 72 percent over the past four quarters. The growth expectation for the quarter is 7.7 percent.

The Dow Jones Industrial Average .DJI rose 81.25 points, or 0.35 percent, to 23,516.26, the S&P 500 .SPX gained 0.49 points, or 0.02 percent, to 2,579.85 and the Nasdaq Composite .IXIC dropped 1.59 points, or 0.02 percent, to 6,714.94.

FILE PHOTO: Workers stand on steps opposite the Bank of England in the City of London, Britain November 1, 2017. REUTERS/Toby Melville

Housing .HGX fell 1.07 percent on the tax plan, which would maintain the deductions for mortgage interest on existing loans and newly purchased homes for up to $500,000.

The dollar fell to its lowest in a week against a basket of major currencies after the tax details were released, and showed little reaction to Powell’s nomination.

FILE PHOTO: Pedestrians leave and enter the London Stock Exchange in London, Britain August 15, 2017. REUTERS/Neil Hall/File Photo

The dollar index .DXY fell 0.13 percent, with the euro EUR= up 0.35 percent to $1.1658.

Sterling skidded after the Bank of England raised interest rates for the first time in more than 10 years but said it expected only “very gradual” further increases over the next three years.

Sterling dropped 1.1 percent GBP= and was on track for its biggest one-day drop since June, and Britain's main FTSE 100 stock index climbed .FTSE 0.9 percent.

The rest of Europe retreated from two-year highs hit in the prior session. The pan-European FTSEurofirst 300 index .FTEU3 lost 0.36 percent and MSCI's gauge of stocks across the globe .MIWD00000PUS gained 0.05 percent.

U.S. Treasuries prices ended the day higher.

Benchmark 10-year U.S. Treasury notes US10YT=RR last rose 8/32 in price to yield 2.3487 percent, from 2.376 percent late on Wednesday.

Reporting by Chuck Mikolajczak; Editing by Bernadette Baum and Dan Grebler

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