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Thursday, January 22, 2015

Wall Street gains after ECB stimulus move

US stocks rose after the European Central Bank announced larger than expected measures to stimulate the region's sagging economy.

The ECB will buy 60 billion euros worth of assets per month, more than markets had been hoping for, in a program that will last through September 2016.

Shares in Europe jumped 1.6 percent to close at a seven-year high.

Analysts said that the ECB's decision had for the most part been priced into market activity in previous days' trading, and that many questions still remain about the strength of Eurozone activity.

At 1:46 pm EST (1846 GMT) the Dow Jones industrial average rose 127.83 points, or 0.73 percent, to 17,682.11, the S&P 500 gained 16 points, or 0.79 percent, to 2,048.12 and the Nasdaq Composite added 42.51 points, or 0.91 percent, to 4,709.93.

The energy sector weighed on gains, as the US energy statistics agency said weekly oil stockpiles were four times higher than analysts polled by Reuters had expected. The S&P 500 energy sector fell 0.7 percent.

Financial firms led gains boosted by the ECB move, as the S&P 500 financials ticked up 1.8 percent.

Wells Fargo and Bank of America rose 2 percent and 2.9 percent, respectively.

Major oil producers like Chevron and Occidental, as well as oilfield service provider Schlumberger were all lower on the day.

Verizon Communications was the largest points weight on the S&P 500, down 2.2 percent to $47.18 after swinging to a net loss in its latest quarter.

The stock weighed on both the Dow and on telecom stocks , which were by far the weakest S&P 500 sector of the day, down 1.6 percent.

American Express Co also weighed on the Dow, falling 3 percent to $85.04, a day after it said it would cut more than 4,000 jobs this year as expenses and provisions for bad loans rose.

F5 Networks Inc slumped 12 percent to $110.87. The network equipment maker's revenue missed expectations for the first time in eight quarters. It also forecast current-quarter revenue and profit below estimates.

With 11 percent of S&P 500 components having reported, 79 percent have topped earnings expectations while 55.4 percent have beaten on revenue, according to Thomson Reuters data. That compares with the long-term average of 63 percent for earnings and 61 percent for revenue.

US jobless claims fell from a seven-month high in the latest week, though the decline was less than expected.

Advancing issues outnumbered declining ones on the NYSE by 2,200 to 813, for a 2.71-to-1 ratio; on the Nasdaq, 1,698 issues rose and 992 fell, for a 1.71-to-1 ratio.

The S&P 500 was posting 62 new 52-week highs and 5 lows; the Nasdaq Composite was recording 38 new highs and 63 new lows.

European stocks also look cheap with earnings factored in, trading at the lowest price-to-earnings ratio to the US market in 2-1/2 years, Thomson Reuters Datastream figures show.

Giant fund manager Pimco, which has $1.68 trillion in assets under management, said on Tuesday it has placed an 'overweight' position on global equities, particularly European stocks.

Britain's FTSE 100 index was up 0.3 percent today, Germany's DAX was down 0.2 percent and France's CAC 40 was 0.1 percent lower.

Greek banks rose 1.3 percent after a banking source told Reuters late on Wednesday the ECB had approved an emergency funding line for Greek banks to be provided via the national central bank.

Logitech surged 10.3 percent as the Swiss maker of computer peripherals said it was raising its guidance for full-year operating income.

Meanwhile, Japanese shares edged up today as the yen sagged versus the dollar after surging the previous day, although caution ahead of the closely-watched European Central Bank policy meeting firmly later in the day capped gains.

Upcoming domestic corporate earnings announcements also added to the wait-and-see mood. The Nikkei ended 0.3 percent higher at 17,329.02. The broader Topix slipped 0.1 percent to 1,389.43 and the JPX-Nikkei Index 400 shed 0.1 percent to 12,631.01.

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Tags:  Stocks  shares  FTSEurofirst  Nikkei  US  Dow Jones  





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