By ELAINE KURTENBACH
AP Business Writer
Stocks are moving solidly higher in early trading on Wall Street at the beginning of a holiday-shortened week. Markets were reassured after President Joe Biden said he would nominate Jerome Powell for a second four-year term at the helm of the Federal Reserve, a vote of confidence in Powell’s handling of central bank policies during the brutal disruptions caused by the coronavirus pandemic. The dollar also strengthened against other currencies and the price of gold, a haven for when investors feel anxious, fell. The S&P 500 was up 0.5% in the early going, and the Nasdaq was up 0.6%.
THIS IS A BREAKING NEWS UPDATE. AP’s earlier story follows below.
Markets opened higher in Europe on Monday after a mixed day of trading in Asia.
A resurgence of coronavirus outbreaks has prompted some countries to look to stricter precautions to curb yet another wave of the pandemic.
Austria went into a nationwide lockdown early Monday in a desperate effort to contain spiraling infections. The country’s chancellor, Alexander Schallenberg, announced last week that Austria will introduce a vaccine mandate as of Feb. 1.
Tens of thousands of people marched through Brussels on Sunday to protest reinforced COVID-19 restrictions imposed by the Belgian government.
The World Health Organization said last week that Europe was the hot spot of the pandemic right now, the only region in which COVID-19 deaths were rising.
Still, markets appeared to be off to a strong start for the week. Germany’s DAX edged 0.1% higher to 29,774.11 and the CAC 40 in Paris gained 0.3% to 7,130.80. Britain’s FTSE 100 picked up 0.4% to 7,251.02.
U.S. futures also pointed to an upbeat start, with the contracts for the Dow Jones Industrial Average and the S&P 500 both up 0.3%.
On Wall Street on Friday, the Nasdaq composite gained 0.4%, while the S&P 500 shed 0.1%. The Dow industrials fell 0.8%. The Russell 2000 index lost 0.9% to 2,343.16.
Investors are waiting to see if President Joe Biden decides to keep Jerome Powell at the Fed’s helm.
Biden is expected to announce within days whom he will choose for the nation’s most powerful economic position. Many Fed watchers expect Powell to be offered a second term, though Lael Brainard, a member of the Fed’s Board of Governors, has emerged as a leading alternative.
The decision could have a sweeping impact given the pivotal role the Fed plays in setting the future course for the world’s largest economy.
In Asia on Monday, the Shanghai Composite index gained 0.6% to 3,582.08 while the Hang Seng in Hong Kong lost 0.4% to 24,951.34.
South Korea’s Kospi surged 1.4% to 3,013.25 as shares in the country’s biggest company, Samsung Electronics, jumped 5.2%.
Tokyo’s Nikkei 225 recovered from earlier losses, edging 0.1% higher to 29,774.11. In Australia, the S&P/ASX 500 gave up 0.6% to 7,353.10.
India’s Sensex sank 2.5%.
Reports that advisers to the Chinese central bank were pointing to risks of inflation and slow growth leading to “quasi-stagflation” signaled the conflicting pressures Beijing is facing.
Controls on property lending, fresh waves of COVID-19 outbreaks and strict policies to fight them and surging prices are all adding to China’s policy challenges, Ting Lu of Nomura said in a report.
“A raft of meeting memos and policy reports show that Beijing is becoming increasingly concerned about the growth slump and has begun to take action to shift its policy stance in order to prevent growth from sliding further,” Ting said.
Shares have generally been gaining ground as companies reported better than expected profits for the last quarter.
Still, most face higher raw materials costs and supply chain problems that could crimp future profits. Consumers have so far absorbed higher prices, but analysts fear they could start economizing if higher prices persist too long.
“Stock markets continue to trade at or near record highs in the U.S., and who can blame them? U.S. data remains strong although the inflation noise gets louder by the day,” Jeffrey Halley of Oanda said in a commentary.
The situation is putting pressure on the Federal Reserve to move faster to rein in its ultra-low-rate policies in order to combat rising prices. On Friday, analysts at Bank of America projected that the Fed will likely start raising its benchmark interest rate in the second quarter of 2022, two quarters earlier than they had previously forecast.
In other trading, U.S. benchmark crude oil added 30 cents to $76.24 per barrel in electronic trading on the New York Mercantile Exchange. Brent crude, the basis for international pricing, added 25 cents to $79.14 per barrel.
The U.S. dollar rose to 114.08 Japanese yen from 113.96 yen on Friday. The euro slipped to $1.1284 from $1.1289.
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