Markets

dow jones asx set to follow wall street rebound after sell off

Written by The ReReport



A LIMPING Australian share market is poised to claw back ground from its new 12-month low, with early trade set to mirror a tech-driven bounce on Wall Street overnight.The SPI200 futures contract was up 73 points, or 1.3 per cent, to 5,701.0 at 0800 AEDT on Friday, signalling a lift for the ASX after it bled red during Thursday’s session, losing three per cent and closing at its lowest since October last year.The plunge wiped about $50 billion off the value of the share market.The Australian dollar is also up, buying 70.81 US cents from 70.74 US cents on Thursday.US stocks gained overnight as Microsoft’s strong earnings helped Nasdaq-listed companies stage a rebound from the tech-heavy index’s worst decline since 2011.The Dow Jones Industrial Average rose 401.13 points, or 1.63 per cent, to 24,984.55, the S&P 500 added 49.47 points, or 1,86 per cent, to 2705.57 and the Nasdaq Composite jumped 209.93 points, or 2.95 per cent, to 7,318.33.This is likely to herald a turnaround for the ASX, which saw its worst month in more than three years continue on Thursday.The local bourse is down more than eight per cent for October — and down 10 per cent since August — edging ever closer to an 18-month low of February 2016 after five straight session of losses.Meanwhile, Qantas will hold its annual meeting today, having already announced a 6.3 per cent rise in first-quarter revenue.Elsewhere, a sharp drop in copper inventories has outweighed fears over sliding stock markets and the potential for slower global growth, pushing the metal’s price higher.Iron ore and oil prices also gained overnight, while gold cooled as global stocks rebounded.media_cameraUS markets are on pace for their worst month since May 2010. Picture: Drew Angerer/Getty Images/AFPWALL ST REBOUNDS AFTER UPBEAT EARNINGS — ReutersUS stocks have jumped, giving the Nasdaq its biggest daily gain since March, as Microsoft’s upbeat earnings spurred a rebound in technology names and investors snapped up oversold shares.The Nasdaq rose three per cent on Thursday, a day after it confirmed a correction and registered its biggest decline since 2011.The Dow and S&P 500 both moved back in positive territory for the year. Microsoft jumped 5.8 per cent after it beat consensus estimates for revenue and profit. That, along with gains in chipmakers, helped technology stocks rise 2.89 per cent.The latest round of upbeat results came from a wide range of companies, including Ford Motor Co, Visa Inc, Whirlpool Corp and Twitter Inc, and offered relief after the earnings season began on a tepid note and then geared lower on sluggish outlooks from manufacturers and chipmakers.The Dow Jones Industrial Average rose 401.13 points, or 1.63 per cent, to 24,984.55, the S&P 500 gained 49.47 points, or 1.86 per cent, to 2,705.57 and the Nasdaq Composite added 209.94 points, or 2.95 per cent, to 7,318.34.The Nasdaq registered its biggest daily percentage gain since March 26.Stocks have sold off recently amid worries over the impact of tariffs and China’s profit slowdown, as well as concerns ranging from rising costs, bond yields, Italy’s budget struggles and the US congressional elections.In a further sign economic growth is moderating, US business spending on equipment appeared to have remained slow in September and the goods trade deficit widened further as rising imports outpaced a rebound in exports.But the recent sell-off has also made stocks slightly cheaper. The S&P 500’s valuation fell to a two-and-a-half-year low of 15.3 times profit estimates for the next 12 months from 15.8, according to Refinitiv data.Results from S&P 500 companies have pushed up third-quarter profit growth estimates to 23.6 per cent from 21.8 per cent in the last 10 days. But dour forecasts have pulled down fourth-quarter growth estimates to 19.4 per cent from 19.9 per cent, according to I/B/E/S data from Refinitiv.Ford, which is struggling with sales in China, rose 9.9 per cent as its earnings report raised hopes for a strong finish to the year, bolstering gains in the consumer discretionary sector.Advanced Micro Devices’ weak forecast sent its stock tumbling 15.4 per cent. But the Philadelphia Semiconductor index rose 2.3 per cent, helped by Xilinx’s 15 per cent jump on its strong quarterly report.After the bell, shares of Amazon.com and Alphabet fell sharply following the release of their results. Amazon was down 3.9 per cent while Alphabet was down 3.4 per cent.Advancing issues outnumbered declining ones on the NYSE by a 2.35-to-1 ratio; on Nasdaq, a 2.43-to-1 ratio favoured advancers.The S&P 500 posted 1 new 52-week highs and 37 new lows; the Nasdaq Composite recorded 15 new highs and 225 new lows.Originally published as ASX to rebound after $50 billion wipeout



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