Shock and shrug: U.S. stocks brush off latest round of global threats

Tue May 16, 2017 12:53pm EDT
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By Lewis Krauskopf

NEW YORK (Reuters) - Another global shock. Another collective yawn by U.S. stock investors.

Equity investors appeared to largely brush off the latest apparent threat to the world's security: A global cyber attack, which began spreading on Friday that by Monday had infected computers in more than 100 countries. Adding to global jitters, North Korea said it had successfully conducted a mid- to-long-range missile test and would continue such launches "any time, any place."

Yet major U.S. stock indexes moved higher on Monday, with the benchmark S&P 500 .SPX touching a record high, as stocks continued to rally even as many investors worry about unbridled optimism and expensive valuations.

"I am really on pins and needles to be honest with you because there are so many threats to this stability and this complacency which have not yet been priced into the market," Peter Kenny, senior market strategist at Global Markets Advisory Group in New York.

"It is just a question of what straw is going to break the camel’s back and then there is going to be all sorts of reasons that the market should have sold off," Kenny said.

While past cyber attacks may have had limited impact on the market, the WannaCry attack was described as having "unprecedented" global reach at a time people increasingly rely on technology to store their sensitive data. The attack follows hacking incidents during the U.S. and French elections.

"The cyber attack I would have imagined would have created some nervousness and anxiety, and throw in North Korea over the weekend, I'm confused on why the market is doing what it's doing," Ken Polcari, director of the NYSE floor division at O’Neil Securities in New York.

U.S. equities continued to move upward on Monday, a trend that has been firmly in place since the U.S. presidential election in November. Helped by higher oil prices, the benchmark S&P 500 .SPX rose 0.5 percent on Monday and set a new all-time high. In Europe, where the attack took center stage, investors also showed limited concerns. European shares closed higher while the UK’s FTSE 100 .FTSE edged up to end at a record high.   Continued...

Traders work on the floor of the New York Stock Exchange (NYSE) in New York, U.S., May 15, 2017. REUTERS/Brendan McDermid