“The combination of very low interest rates and modest earnings going forward and supportive central banks and now some indication of fiscal stimulus in Japan – the third largest economy – this is a mix that stock investors can support”, said James Russell, portfolio manager at investment firm Bayle & Gaynor.
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The Dow Jones industrial average rose 151 points, or 0.8 percent, to 18,523 at 11:07 a.m. As the earnings season gathers steam, investors will parse reports to justify stock valuations.
The CBOE Volatility Index (VIX – 12.82) dipped 0.2 point, or 1.7%, and finished at its lowest mark since August.
Financial stocks have led the S&P 500 and the Dow industrials to record highs after JPMorgan’s strong quarterly results, while upbeat economic data cemented bets that the current rally on Wall Street can chug along.
The high-profile and closely watched bank reported second-quarter earnings per share of $1.55, easily surpassing the $1.43 analyts had forecast.
The broad-market S&P 500 extended its record streak to a fourth day, advancing 0.5 per cent to 2,163.75. “If banks are healthy. then that clearly has more positive implications for economic growth”.
Spot gold prices fell to a two-week low of $1,319.82 an ounce.
The Nasdaq composite increased 28.33 points, or 0.6 percent, to 5,034.06.
USA stocks have been on a rocky ride since the start of the year. Despite the multisession rise, financials are still the only S&P 500 sector in negative territory so far this year, down 1.3%.
But a strong USA jobs report last Friday, hopes that Japan’s ruling party will flood its market with even more money and signs of political stability in Britain as its new prime minister takes over have lifted investor spirits.
Six banks report earnings on Friday including S&P 500 components Wells Fargo and Citigroup.
Shares of Japanese messaging app operator Line Corp soared as much as 37 per cent in their U.S. market debut in the biggest tech IPO this year. Line has more users than Facebook or Twitter in Japan.
KFC owner Yum Brands climbed 2.53 dollars, or 3%, to 88.27 dollars after reporting better-than-expected profit late on Wednesday. Britain’s FTSE 100 slipped 0.2%.
REST OF EUROPE: Germany’s DAX was up 1.6 percent while the CAC-40 in France rose 1.3 percent.
ASIA’S DAY: Japan’s Nikkei closed almost 1 percent higher as the yen weakened against the dollar. Hong Kong’s Hang Seng index rose 1.1 percent.
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POUND GAINS: The Bank of England’s decision not to act sent investors into the British currency, pushing it up to $1.3367 from $1.3160 a day earlier. The euro rose to $1.1131 from $1.1110 and the dollar rose to 106.20 yen from 105.26 yen.
