Upbeat company earnings lifted US and European stock prices on Wednesday, with the Dow and S&P 500 setting record highs, while the dollar reached a four-month peak on bets the US Federal Reserve may raise interest rates by year-end. Through the morning, it has remained within 0.1 percent, up or down, of its record close set on Wednesday.
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The Dow won its sixth straight record, gaining 0.2 per cent to 18,595.03.
The Nasdaq Composite was down 7.98 points, or 0.16 per cent, at 5,065.92.
The ECB left interest rates unchanged, as was widely expected, and said it expects rates to remain at present or lower levels for an extended period of time. France’s CAC 40 index added 0.1 percent, Britain’s FTSE 100 was basically flat and Germany’s index was up 0.4 percent. Economists are speculating about whether its central bank will push more stimulus. It led the industrials sector down 0.8 per cent.
The yield on the 10-year Treasury note held steady at 1.57 percent, while the yield on the 30-year Treasury bond ticked down to 2.28 percent from 2.29 percent late Thursday.
One of the notable drags on the market was Disney, down 1 per cent after Stifel downgraded the stock.
CLOSE BEHIND: Intuitive Surgical was the third-best performing stock in the S&P 500.
Meanwhile, the major European markets turned in a mixed performance on the day.
General Motors reported a record second-quarter profit Thursday that beat Wall Street expectations, sending shares up more than 6 percent in premarket trading.
Companies are in the middle of telling investors how much they earned in the spring, and analysts are forecasting yet another decline from year-ago levels.
Many doubts still hang over the market, including the continued drop for corporate earnings and a US economy that is growing only modestly.
“The market can handle a little strength in the dollar but not if it starts to impact other areas that cause financial conditions to tighten”, said Sonders of Charlies Schwab. “It’s the best relative purchase out of markets”.
Better-expected earnings from Wall Street bank Morgan Stanley (MS), which topped both profit and revenue projections also boosted investor sentiment. The price of gold fell $17.40, or 1.3 percent, to $1,314.90 per ounce.
Southwest Airlines (LUV.N) fell 11.2% and led other airline stocks lower after the company forecast a drop in a key profitability metric.
Now, let’s look at the day’s biggest stock movers and the best investment strategy for biotech stocks.
Computer network solutions provider Gigamon (GIMO) grabbed the biggest percentage gain, up 8% in heavy volume. South Korea’s KOSPI edged down 0.1 percent at 2,010.34. (NASDAQ: AAPL) and United Technologies Corp (NYSE: UTX) were among the biggest decliners, losing at least 0.7%. A report showed USA jobless claims unexpectedly fell to a three-month low last week, while home resales unexpectedly rose in June to their fastest pace in more than nine years.
Crude oil fell 2.2% to $44.75/bbl. dragging energy stocks down with it. Exxon Mobil Corporation (NYSE:XOM) fell 0.09%, Occidental Petroleum Corporation (NYSE:OXY) lost 0.81% and Chevron Corporation (NYSE:CVX) fell 0.19%.
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Twenty-First Century Fox fell 75 cents, or 2.7 percent, to $27.00 amid widespread reports that its Fox News business will soon cut ties with its head, Roger Ailes, following allegations of sexual harassment.
