Volkswacht Bodensee - Stocks diverge as investors weigh earnings, Trump policies

Wall Street stocks hesitated at the opening bell, with the S&P 500 edging higher but still enough to set another record high. The Dow dipped while the tech-heavy Nasdaq rose a few points.

"It is fair to say that there is a festering sense that the market may be due for a consolidation period given the scope of recent gains," said Briefing.com analyst Patrick O'Hare, pointing to a six percent gain by the S&P 500 since the beginning of last week and a similar rise in the Nasdaq.

"Those are big moves in front of a big week next week that will feature earnings reports from Apple, Meta Platforms, Microsoft, Tesla and Amazon.com" as well as an interest rate meeting by the US Federal Reserve and the release of the Fed's preferred inflation gauge, he added.

Wall Street's major indices were still poised to end the week with solid gains, thanks in no small part to comments and actions by Trump since his return to the White House on Monday.

In Asian trading, Hong Kong gained nearly two percent and Shanghai also advanced following Trump's tax-cut pledge and his more friendly comments with regard to China.

In a speech via video link Thursday at the World Economic Forum in Davos, Trump pushed for lower interest rates and said he would cut taxes for companies investing in the United States while imposing tariffs on those who do not.

He also said in a separate interview that he would "rather not" impose tariffs on China and signalled openness at negotiating a trade deal with Beijing.

"Clearly these are off-the-cuff remarks but it has left the overnight market feeling like there's a scenario where China escapes the worst of the tariff regime," said Jim Reid, managing director at Deutsche Bank.

In Japan, Tokyo's stock market dropped and the yen briefly rallied after the Bank of Japan lifted borrowing costs to their highest level since 2008 and flagged further increases in the pipeline.

Moody's Analytics said "the weak yen is a key reason" for the hike, along with a run of forecast-beating inflation reports.

The yen has come under pressure against the dollar in recent months after the US Federal Reserve dialled back its expectations for rate cuts this year, and amid concerns that Trump's policies would reignite inflation.

In Europe, London stocks fell after data showed an increase in job cuts despite business activity coming out stronger than expected.

In company news, British fashion house Burberry showed signs of recovery despite posting a further decline in sales, sending its shares soaring 11 percent.

In the wake of the results, Paris stocks rose thanks to gains in the luxury sector, with Gucci-owner Kering jumping four percent and LVMH up one percent on hopes of a China-led recovery.

Meanwhile data showed that business activity in the eurozone bounced back in January after a two-month contraction.

The release of the closely watched data throughout Europe "brought a significant degree of optimism, coming as global leaders discuss the hopelessness of the region in Davos", said Joshua Mahony, chief market analyst at Scope Markets.

Oil prices recovered some of Thursday's losses that followed Trump's call to Saudi Arabia and OPEC to lower prices, with a recent build in US stockpiles adding to the weakness.

- Key figures around 1430 GMT -

New York - Dow: DOWN 0.2 percent at 44,497.75 points

New York - S&P 500: UP less than 0.1 percent at 6,120.41

New York - Nasdaq Composite: UP 0.1 percent at 20,079.60

London - FTSE 100: DOWN 0.4 percent at 8,531.37

Paris - CAC 40: UP 0.5 percent at 7,935.15

Frankfurt - DAX: UP less than 0.1 percent at 21,417.21

Tokyo - Nikkei 225: DOWN 0.1 percent at 39,931.98 (close)

Hong Kong - Hang Seng Index: UP 1.9 percent at 20,066.19 (close)

Shanghai - Composite: UP 0.7 percent at 3,252.63 (close)

Dollar/yen: UP at 156.38 yen from 156.03 yen on Thursday

Euro/dollar: UP at $1.0479 from $1.0415

Pound/dollar: UP at $1.2422 from $1.2352

Euro/pound: UP at 84.36 pence from 84.31 pence

West Texas Intermediate: UP 0.5 percent at $74.98 per barrel

Brent North Sea Crude: UP 0.7 percent at $78.80 per barrel

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L.Maurer--VB