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Economy

Wall Street rises to records, underpinned by strong earnings reports

By Lewis Krauskopf, Devik Jain and Shashank Nayar

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Wall Street rises to records, underpinned by strong earnings reports
© Reuters. FILE PHOTO: Traders work on the floor of the New York Stock Exchange (NYSE) in New York City, U.S., October 19, 2021. REUTERS/Brendan McDermid

By Lewis Krauskopf, Devik Jain and Shashank Nayar

(Reuters) – Wall Street’s main indexes rose modestly on Tuesday to intraday record highs as a strong earnings season continued to lift sentiment for equities, while investors were looking ahead to a critical Federal Reserve meeting.

Pfizer (NYSE:) shares rose 5.2% after the drugmaker said it expected 2021 sales of the COVID-19 vaccine it developed with German partner BioNTech to reach $36 billion. The stock helped push the healthcare sector up 0.9%.

Overall, third-quarter earnings have come in better-than-expected for U.S. companies as the economy continues to bounce back from the coronavirus pandemic. With some 320 companies having reported so far, S&P 500 earnings are expected to have climbed 40.2% in the third quarter from a year ago, according to Refinitiv IBES.

“From a fundamental perspective, there is a strong underpinning for the performance of the broad equity market complex,” said Bill Northey, senior investment director at U.S. Bank Wealth Management.

“The next several days and weeks will include significant developments on the policy front, and we are watching that very closely because as we transition out of the earnings reporting season many of the macro factors will start to take center stage again.”

The rose 141.12 points, or 0.39%, to 36,054.96, the S&P 500 gained 15.37 points, or 0.33%, to 4,629.04 and the added 18.53 points, or 0.12%, to 15,614.45.

The economically sensitive Average soared 5.9% to hit an all-time intraday high, lifted by a 95% surge in shares of car-rental firm Avis Budget (NASDAQ:) after it reported earnings.

Among S&P 500 sectors, materials rose about 1% and real estate added 0.9%. Consumer discretionary fell 1%, dragged lower by a 4% drop in Tesla (NASDAQ:) shares.

The Fed on Wednesday is expected to approve plans to scale back its $120 billion monthly bond-buying program put in place to help the economy during the pandemic. Investors will also be focused on commentary about interest rates and how sustained the recent surge in inflation is.

“Today the economy is in a much better footing and with inflation at current levels we don’t need such amount of accommodative policies and a taper in turn will send a signal to the market that the economy is better off,” said Michael Sheldon, chief investment officer at RDM Financial Group at Hightower in Westport, Connecticut.

In company news, shares of Under Armour Inc (NYSE:) jumped 17% after the athletic apparel maker raised its annual forecasts.

Declining issues outnumbered advancing ones on the NYSE by a 1.30-to-1 ratio; on Nasdaq, a 1.49-to-1 ratio favored decliners.

The S&P 500 posted 55 new 52-week highs and 4 new lows; the Nasdaq Composite recorded 164 new highs and 44 new lows.

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Economy

Oil Prices Fall amid Protests in China

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Oil prices decline

Oil prices fell on Monday amid a general decline in investor appetite for risk amid information about the ongoing protests in China against vested restrictions.

The cost of January futures on Brent crude oil on London’s ICE Futures exchange was $81.31 per barrel on Monday, down $2.32 (2.77%) from the close of the previous session. At the close of trading on Friday, those contracts fell $1.71 per barrel to $83.63.

Oil prices decline – what’s going on in the market?

The price of WTI futures for January crude fell by $2.31 (3.03%) to $73.97 per barrel in electronic trading on the New York Mercantile Exchange (NYMEX). By closing of previous trades, the cost of these contracts decreased by $1.66 (2.1%) to $76.28 per barrel. Brent and WTI gained 4.6% and 4.8%, respectively, last week.

According to Bloomberg, protests were held in cities across the country, including the capital Beijing, as well as Shanghai, Xinjiang, and Wuhan, which was originally the epicenter of the COVID-19 spread.

That contributes to a stronger U.S. dollar, which reduces the attractiveness of investments in crude, and also raises the possibility of even more significant tightening of restrictions by Chinese authorities, the agency said.

“The outlook for the oil market remains unfavorable and the events of this weekend in China do not add to the positive,” notes Warren Patterson, who is in charge of commodities strategy at ING Groep NV in Singapore.

According to the forecast of analytical company Kpler, oil demand in China in the fourth quarter will decrease to 15.11 million barrels per day (bpd) compared to 15.82 million bpd a year earlier.

Earlier we reported that Russia will ban the sale of its oil to countries that have imposed a price ceiling.

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Economy

Oil Russia ban news: Russia will ban the sale of its oil to countries that have imposed a price ceiling

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oil Russia ban

Will Russia sell oil to Europe? The administration of President Vladimir Putin is preparing an order prohibiting Russian companies and any trader from buying Russian oil to sell raw materials to countries and companies that have imposed a price ceiling on Moscow. Bloomberg news agency wrote this, citing a report from sources.

“The Kremlin is preparing a presidential decree banning Russian companies and any traders buying national oil from selling it to anyone who participates in the price ceiling,” the publication wrote.

According to the newspaper’s interlocutors, this would prohibit any mention of the price ceiling in contracts for Russian crude, as well as transferring it to countries that have joined the price ceiling for the natural resource.

In the first half of September, the press service of the US Treasury Department said that the USA, together with its allies from G7 (Great Britain, Germany, Italy, Canada, France and Japan) and the European Union (EU) would impose a ban on marine transportation of Russian oil on December 5 and oil products – on February 5.

Earlier we reported that EU negotiations on limiting the prices of Russian oil reached a deadlock today.

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Economy

EU talks on restrictions on Russian crude oil prices today stalled

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russian crude oil price today

Negotiations between the European Union countries about the “ceiling” of Russian crude oil prices today reached an impasse; Bloomberg reported, according to its sources.

Representatives of the bloc cannot reach an agreement on the ceiling price of Russian oil. According to the agency, the proposed European Commission limit of $65-70 per barrel, Poland and the Baltic countries believe “too generous,” while Greece and Malta, which is actively engaged in transporting fuel, do not want the limit to fall below $ 70. Recall that the Russian response to the oil price cap was negative. The Russian government has officially said that it will only sell oil at market prices.

“We are looking for ways to make this solution work and we are trying to find a common ground to implement it in a perfectly pragmatic and efficient way, while avoiding that it may cause excessive inconvenience to the European Union,” said German Chancellor Olaf Scholz.

Earlier, we reported that the SEC fined Goldman Sachs $4 million for non-compliance with ESG fund principles.

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