Wall Street ends at fresh records, Spanish stocks gain

New York - Wall Street stocks finished at new records on Wednesday on optimism about earnings season, while Spanish equities rallied after Catalan leader Carles Puigdemont adopted a more conciliatory tone in a speech on Catalan independence.

All three major US indices ended at records after solid reports from Delta Air Lines and investment management firm BlackRock lifted expectations about major bank earnings in the coming days.

US investors have taken heart from the relatively small number of companies that have warned that they would miss forecasts due to the storms, said Mike Bailey, director of research at FBB Capital Partners.

"You could argue that some of the hurricanes might have disrupted companies, but we would have expected those companies to issue profit warnings, and we have not seen a ton of them so far," Bailey said.

Tokyo's Nikkei 225 index finished the day 0.3% higher at 20 881.27 points - its best finish since December 1996, although still below its all-time high of almost 39 000 in 1989 before a stock and property market bubble collapsed.

Japan's corporates have generated bumper profits and the economy is enjoying its best growth spurt for years, while equities have also been supported by a global rally.

Analysts say the Japanese market has benefited from the weaker yen after Prime Minister Shinzo Abe swept to power on a pledge to resuscitate the once-booming economy with a plan dubbed Abenomics.

Madrid rallies, euro up

Elsewhere, equity markets in Europe were mixed, with Paris and London edging down, while Frankfurt drifting higher.

The Spanish capital's benchmark IBEX 35 index of top companies jumped 1.4%, following Puigdemont's remarks, the latest move since an October 1 referendum vote that Spain has said was illegal.

Puigdemont said the referendum had given him a mandate for independence but immediately asked regional lawmakers to suspend the declaration to allow for negotiations with the central government.

Spanish Prime Minister Mariano Rajoy gave Catalonia's separatist leader until next week to clarify whether he intends to push ahead with independence, warning that Madrid would take control of the region if it insisted on breaking away.

The euro gained on the remarks, which suggested that any move by Catalan to become independent "seems more likely to happen later rather than sooner, easing pressure on the euro," said Joe Manimbo, analyst at Western Union Business Solutions.

Meanwhile, minutes from the Federal Reserve's September meeting suggested another interest rate increase in December was likely, although some policy makers expressed concern at weak inflation.

"The mixed tone of the minutes kept December in play for another rate hike," Manimbo said. "However, they left some doubt as to whether officials would raise rates as many as three times next year, which kept the dollar pinned near session lows."

SUBSCRIBE FOR FREE UPDATE: Get Fin24's top morning business news and opinions in your inbox.

Read Fin24's top stories trending on Twitter: Fin24’s top stories