Wall St follows European shares higher after solid retail sales data
· CNA · JoinNEW YORK : U.S. stocks followed their European counterparts higher on Thursday as investors parsed an array of mixed quarterly earnings and digested a series of robust economic reports.
All three major U.S. stock indexes advanced in early trading and the dollar built on recent gains after a report from the Commerce Department showed stronger-than-expected retail sales, and the Labor Department's initial jobless claims data landed below economists' estimates.
The S&P 500 and the Dow continue to hover close to their recent record closing highs.
Gold hit a record high as the safe-haven metal benefited from looming election uncertainties.
Technology shares, particularly chips provided much of the upside muscle after Taiwan Semiconductor Manufacturing, beat earnings estimates and forecast a jump in fourth-quarter revenue, helping to ease fears of softening demand in the sector.
"You have this schizophrenic behavior toward chips this week," said Chuck Carlson, chief executive officer at Horizon Investment Services in Hammond, Indiana. "We had ASML’s disappointing guidance and that drove a sharp decline."
"But then you have TSM coming out and beating estimates and that's indicative of what happens during earnings season where even within hot sectors you've got winners and losers and the market's going to react to those particular earnings on that particular day," Carlson added.
Growth shares were outperforming value, while regional banks were ahead of the pack in the wake of upbeat earnings from M&T Bank, KeyCorp and others.
The Dow Jones Industrial Average rose 125.86 points, or 0.29 per cent, to 43,203.56, the S&P 500 rose 10.98 points, or 0.19 per cent, to 5,853.45 and the Nasdaq Composite rose 49.74 points, or 0.27 per cent, to 18,416.82.
European shares held onto previous gains after the European Central Bank (ECB) implemented a broadly expected 25-basis-point rate cut, while offering scant clues regarding its next move.
The move marked the ECB's third rate cut this year as the central bank has shifted its focus from reining in inflation to shoring up the EU's sputtering economy.
MSCI's gauge of stocks across the globe rose 0.85 points, or 0.08 per cent, to 853.07. The STOXX 600 index rose 0.9 per cent, while Europe's broad FTSEurofirst 300 index rose 19.77 points, or 0.96 per cent.
Emerging market stocks fell 8.89 points, or 0.78 per cent, to 1,135.15. MSCI's broadest index of Asia-Pacific shares outside Japan closed lower by 0.44 per cent, to 601.64, while Japan's Nikkei fell 269.11 points, or 0.69 per cent, to 38,911.19.
U.S. Treasury yields gained ground after data suggested the U.S. economy is on solid footing, but left the Fed with enough room to move forward on a slower path to lower rates.
The yield on benchmark U.S. 10-year notes rose 7.5 basis points to 4.091 per cent, from 4.016 per cent late on Wednesday.
The 30-year bond yield rose 8.2 basis points to 4.3808 per cent from 4.299 per cent late on Wednesday.
The 2-year note yield, which typically moves in step with interest rate expectations, rose 5 basis points to 3.985 per cent, from 3.935 per cent late on Wednesday.
The dollar touched an 11-week high after retail sales data beat expectations, boosting confidence in the health of the U.S. economy.
The dollar index, which measures the greenback against a basket of currencies including the yen and the euro, rose 0.25 per cent to 103.80, with the euro down 0.36 per cent at $1.0822.
Against the Japanese yen, the dollar strengthened 0.27 per cent to 150.02.
Crude oil prices rose, breaking a recent losing streak as persistent worries over softening demand were tempered by robust U.S. economic data.
U.S. crude rose 0.4 per cent to $70.67 a barrel and Brent rose to $74.33 per barrel, up 0.15 per cent on the day.
Gold prices hit a record high on firming expectations for additional rate cuts from the Federal Reserve and mounting uncertainties surrounding the approaching U.S. presidential election. Spot gold rose 0.84 per cent to $2,695.58 an ounce.
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