Tech Shares Drive U.S. Stock Indexes Higher

U.S. futures rose while European stocks fell in the first trading session of 2018, following steep price increases across global indexes last year.

Futures markets pointed to a 0.3% opening gain for the S&P 500 on Tuesday. The Stoxx Europe 600 slipped 0.4%, dragged down by declines in auto stocks. Markets in the Asia-Pacific region mostly ended higher.

Investors were also watching a continuing slide in the U.S. dollar as the WSJ Dollar Index fell 0.4%, putting it on track for its sixth straight session decline.

Many investors head into 2018 confident that the yearslong market rally can continue amid a strengthening global recovery and corporate earnings growth. Hefty share price gains across the globe added more than $9 trillion in market value to equity markets in 2017. The Dow Jones Industrial Average surged 25% last year, while the S&P 500 rose over 19%.

Those steep gains have made some investors cautious. But many are penciling in further stock price rises in 2018 thanks to firming global growth.

"We'd expect the global expansion to continue and drive equities to new highs in the process," said Shoqat Bunglawala, head of the global portfolio solutions group for EMEA at Goldman Sachs Asset Management.

But Mr. Bunglawala said he expected stock price rises "to moderate given the strong pace we've seen recently" and to be punctuated with short periods of volatility as the Federal Reserve continues to raise interest rates.

In Europe, declines in auto shares helped drag down Germany's DAX index 0.8% and France's CAC 40 index 0.6%, while also weighing on the Stoxx Europe 600. Shares in BMW AG and Renault SA declined 1.6% and 1.2% respectively.

The Stoxx Europe 600 auto subindex was 1.2% lower. The exporter-heavy sector wasn't helped by a 0.4% gain in the euro against the dollar to $1.2060, hovering around levels last seen in September.

Equities in Hong Kong and mainland China led gains in the Asia-Pacific region Tuesday. The Hang Seng Index rose 2%, thanks in part to gains by Chinese messaging-and-gaming heavyweight Tencent Holdings Ltd. Tech stocks broadly notched gains after suffering steep declines last year amid a global pullback from the sector.

Solid Chinese manufacturing data showed the sector remained healthy, said Krystal Tan of Capital Economics. Global economic growth "and accommodative domestic monetary policy should help keep Asian manufacturing sectors in good shape," she said.

China's Shanghai Composite Index rose 1.2%. Elsewhere, Australia's S&P ASX 200 fell 0.1%, while markets in Japan were closed.

The U.S. dollar started 2018 as it ended last year - lower. The greenback fell against a range of developed and emerging market currencies Tuesday. Last year, the WSJ Dollar Index slid 7.5%, its largest percentage decline since 2007.

In bond markets, the yield on the 10-year Treasury note was at 2.432% Tuesday, according to Tradeweb, from 2.409% on Friday.

In commodity markets, Brent crude oil fell 0.3% to $66.69 a barrel. Gold was up 0.3% at $1313.80 an ounce amid the dollar weakness.

Write to Christopher Whittall at christopher.whittall@wsj.com and Kenan Machado at kenan.machado@wsj.com

U.S. stocks rose in the first trading session of 2018, following steep price increases across global indexes last year.

The Dow Jones Industrial Average climbed 115 points, or 0.5%, to 24834 shortly after the opening bell. The S&P 500 rose 0.4% and the Nasdaq Composite added 0.4%.

Many investors head into 2018 confident that the yearslong market rally can continue amid a strengthening global recovery and corporate earnings growth. Soaring stock prices added more than $9 trillion in market value to equity markets in 2017.

Those steep gains have made some investors cautious. But many are penciling in further stock price rises in 2018 thanks to firming global growth.

Mr. Bunglawala added that he expects stock price rises "to moderate given the strong pace we've seen recently" and to be punctuated with short periods of volatility as the Federal Reserve continues to raise interest rates.

Elsewhere, the Stoxx Europe 600 slipped 0.4%, dragged down by declines in real-estate stocks.

Equities in Hong Kong and mainland China led gains in the Asia-Pacific region Tuesday. The Hang Seng Index rose 2%, thanks in part to advances by Chinese messaging-and-gaming heavyweight Tencent Holdings Ltd. Tech stocks broadly notched gains after suffering steep declines last year amid a global pullback from the sector.

China's Shanghai Composite Index rose 1.2%, while markets in Japan were closed.

The U.S. dollar started 2018 as it ended last year -- lower. The WSJ Dollar Index, a measure of the U.S. currency against a basket of 16 others, fell 0.4% Tuesday.

In bond markets, the yield on the benchmark 10-year U.S. Treasury note was at 2.436% Tuesday, according to Tradeweb, from 2.409% on Friday. Yields rise as bond prices fall.

Write to Christopher Whittall at christopher.whittall@wsj.com and Kenan Machado at kenan.machado@wsj.com

Rallying technology and consumer-discretionary shares pushed the Nasdaq Composite toward a fresh record in the first trading session of 2018.

After a banner year for markets around the world, many investors say they are optimistic that the long U.S. stock rally can continue in the year ahead.

Firming global growth and solid corporate earnings have helped lift stocks to fresh highs, even as some investors have grown nervous over the length of the rally.

That backdrop should help major indexes keep rising in 2018, many investors and analysts say, although some expect stock gains to slow.

The Dow Jones Industrial Average climbed 88 points, or 0.4%, to 24807 on Tuesday after notching its second-biggest yearly gain of the past decade in 2017. The S&P 500 rose 0.8% and the Nasdaq Composite added 1.3%, approaching its first close above the 7000 level.

The tech-heavy index first crossed 7000 during intraday trading on Dec. 18.

Shares of technology companies jumped Tuesday, reversing course after sliding in the last trading session of 2017. Alphabet shares rose 2%, while Activision Blizzard added 1.4%.

Meanwhile, analyst upgrades helped push shares of consumer-discretionary companies higher.

Nordstrom jumped 3.% after J.P. Morgan analysts upgraded their rating for the stock to "neutral" from "underweight," while Netflix climbed 4.8% after Macquarie bumped up its rating for the stock to "outperform" from "neutral." The S&P 500 consumer-discretionary sector rose 1.5%, on course to end the day as the best-performing group in the S&P 500.

As major indexes climbed, government bonds and their stock-market proxies pulled back.

The yield on the benchmark 10-year U.S. Treasury note rose to 2.465% from 2.409% on Friday. Yields rise as bond prices fall.

Shares of utilities companies, which many investors consider bondlike because of their hefty dividends, fell 1% in the S&P 500, among the biggest decliners of the broad index's 11 sectors.

Elsewhere, the Stoxx Europe 600 edged down 0.2%, weighed down by declines in real-estate stocks.

Hong Kong's Hang Seng Index rose 2%, thanks in part to advances in shares of Chinese messaging-and-gaming heavyweight Tencent Holdings.

China's Shanghai Composite Index rose 1.2%, while markets in Japan were closed in observance of the holidays.

Kenan Machado contributed to this article.

Write to Christopher Whittall at christopher.whittall@wsj.com and Akane Otani at akane.otani@wsj.com

(END) Dow Jones Newswires

January 02, 2018 16:14 ET (21:14 GMT)