Wall Street opens higher as investors shrug off UK election impact

Analysts said that the impact of the British election on the US market would be limited.
Analysts said that the impact of the British election on the US market would be limited. PHOTO: AFP

NEW YORK (REUTERS) - US stocks opened slightly higher on Friday as the surprise result of the British general election failed to rattle investors.

British voters dealt a blow to Prime Minister Theresa May in a snap election, wiping out her parliamentary majority, just weeks before the beginning of Brexit negotiations.

May said she would form a new government with assistance from Northern Irish party to provide political certainty.

European stocks were choppy on Friday following the election result. The pan-European STOXX 600 index rose 0.15 per cent, while UK's blue chip FTSE 100 index gained 0.74 per cent.

Analysts, however, said the impact from the election on the U.S. market would be limited. "The UK election is a UK event and there is no direct economic impact from that on the US economy," said Steve Blitz, chief US economist at TS Lombard in New York. "Investors are more concerned about Trump and the perception of what he can and can't get passed legislatively in regards to tax reform. The last thing the Republicans want to do is head to the mid-term election in 2018 without any major legislative accomplishments."

Wall Street ended mostly flat on Thursday after former FBI Director James Comey's testimony was seen by investors as having no smoking gun that could affect Donald Trump's presidency.

Mr Comey said Mr Trump fired him to undermine an investigation into Russian meddling into last November's US election and while he had no doubt that Russia interfered with the election, he was confident that no votes had been altered.

The market's concern is whether the Donald Trump administration can put the investigation behind it and revive momentum for its agenda of lower taxes and looser regulations.

Bets on that agenda are partly behind a rally, which has driven stock indexes to record highs.

At 9:34 a.m. ET (9:35 p.m. Singapore time), the Dow Jones Industrial Average was up 43.82 points, or 0.21 per cent, at 21,226.35, the S&P 500 was up 4.59 points, or 0.18 per cent, at 2,438.38. The Nasdaq Composite was up 8.72 points, or 0.14 per cent, at 6,330.48.

Eight of the 11 major S&P 500 indexes were higher, with the financial index's 0.80 per cent rise leading the gainers. Goldman Sachs' 1.2 per cent gain boosted the Dow.