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U.S. Stocks Extend Records on Earnings, Dollar Up : Markets Wrap

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U.S. stocks added to all-time highs as Facebook Inc.’s rally highlighted one of the busiest days for earnings. The dollar advanced, while Treasuries fell in a reversal of moves sparked by the Federal Reserve’s signal that inflation remains persistently low.

The Nasdaq 100 Index jumped to a new high as Facebook’s sales beat sent its shares to a record. Gains in the Dow Jones Industrial Average and S&P 500 Index were less robust, as investors punished shares of companies whose results disappointed. The situation was similar in Europe, where the equity benchmark swung between gains and losses as Nokia Oyj and BASF SE rallied while Deutsche Bank AG slumped. Health-care stocks fell after AstraZeneca Plc suffered a setback to its next-generation cancer medicine. 

Other assets took cues from economic data and the Fed’s decision, with the dollar bouncing back from early losses as data showed U.S. durable-goods orders climbed more than expected. The euro fell for the first time in three days. Treasury 10-year yields rose back above 2.30 percent

Traders have been digesting the latest decision from the U.S. central bank, which said near-term risks to the economic outlook appear balanced, but consumer price growth remains below its target. That signaled policy makers may kick off a reduction in the Fed’s $4.5 trillion balance sheet in September even as they avoid rushing to raise rates. The U.S. reports second-quarter gross domestic product Friday.

As the initial market reaction faded, investors returned their focus to a corporate earnings season in which more than 80 percent of S&P 500 companies that have reported so far delivered higher-than-expected profit.

Read our Markets Live blog here.

Here are some key events coming up:

  • Colombia’s rates decision is due Thursday, Russia’s is Friday.
  • The U.S. economy probably accelerated in the second quarter to a 2.5 percent annualized pace, fueled by a pickup in consumer spending after a slowdown at the start of the year. Data is Friday.
  • Japan will release inflation, unemployment and retail sales for June the same day, supplying the latest snapshot of the economy and the Bank of Japan’s progress toward reaching 2 percent inflation.
  • Corporate results still ahead this week include Credit Suisse Group AG, Nomura Holdings Inc., Exxon Mobil Corp., Chevron Corp., UBS Group AG, Barclays Plc and BNP Paribas SA.

And here are the main moves in markets: 

Stocks

  • The S&P 500 rose 0.2 percent to 2,482.06 at 9:31 a.m. in New York. It’s closed at records the past two days.
  • The Stoxx Europe 600 Index fell less than 0.1 percent, with health-care stocks down 1 percent.
  • The U.K.’s FTSE 100 Index dropped 0.2 percent.
  • Germany’s DAX Index fell 0.7 percent.
  • The MSCI Emerging Market Index rose 0.8 percent to the highest in about three years.

Currencies

  • The Bloomberg Dollar Spot Index increased 0.2 percent.
  • The euro declined 0.3 percent to $1.1699.
  • The British pound rose 0.2 percent to $1.3149, the strongest in more than 10 months.
  • The Swiss franc fell 1 percent to $0.9606, the biggest drop in more than 11 weeks.

Bonds

  • The yield on 10-year Treasuries rose one basis point to 2.30 percent.
  • The German, French and British 10-year yields all fell three basis points after yesterday’s Treasury move.

Commodities

  • West Texas Intermediate crude fell 0.6 percent to $48.45 a barrel.
  • Gold gained 0.2 percent to $1,263.51 an ounce, the strongest in more than six weeks.

Asia

  • Solid earnings from giants Samsung Electronics Co. and Nintendo Co. helped Asian stocks to the highest since 2007.
  • Japan’s Topix index rose 0.4 percent, while Australia’s S&P/ASX 200 Index added 0.2 percent. South Korea’s Kospi index climbed 0.4 percent. In Hong Kong, the Hang Seng Index added 0.7 percent, while the Shanghai Composite Index added 0.1 percent. 
  • The yen traded at 111.45 per dollar, down 0.2 percent.

— With assistance by Adam Haigh

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