US markets rallied on Tuesday propelled by better than expected corporate earnings report from Apple Inc and news that the European Central Bank plans to expand its monetary stimulus program. The S&P 500 jumped 37.27 points, or 2% to 1,941.28, its biggest one-day gain in a year. The benchmark index rose for the fourth straight day and moved above 200-day moving average. This may be interpreted as a sign that last week’s pullback is over. The Dow Jones Industrial Average rose 215 points, or 1.3%, to 16,614.81 and turned positive for the year. Nasdaq Composite index jumped 103.4 points, or 2.4% to 4,419.48, led by gains in biotech stocks. It registered its fourth consecutive gain and best one-day advance in more than two years. Sales of new flagship iPhone 6 helped Apple beat analysts’ estimates. Shares of Apple Inc. rose 2.7% to $102.47, after the company reported a 13% rise in profit, aided by strong demand for its new, bigger-screen iPhones. Boeing Co., Simon Property Group Inc. and Xerox Corp. are among U.S. companies reporting earnings today. As media reported the ECB is planning buying corporate bonds to provide more liquidity in an attempt to fight deflationary pressures, investors took it as a good news even though ECB officials didn’t confirm existence of plans for such expansion. Another piece of good news was National Association of Realtors report yesterday that sales of existing homes rose 2.4% in September to a seasonally adjusted annual rate of 5.17 million from 5.05 million in August. The rate increase indicates real estate market is on a recovery track after an unexpected drop in August, but the September pace is still 1.7% down from a year earlier. Today at 13:00 CET Mortgage applications for the week ended October 17 will be released in US. And at 14:30 CET the Consumer Price Index for September will be released. The tentative outlook for the consumer price index is positive. The euro fell and European stocks rallied on a news report that the ECB may start buying corporate bonds in the secondary market to further stimulate Eurozone economy. The reports had indicated the decision could be made as soon as December and the purchases of corporate debt could start in early 2015. An ECB spokesperson later indicated that the Governing Council “has taken no such decision” about purchasing corporate bonds. The Stoxx Europe 600 index rose 2.1% to close at 323.74, recording gain for the week. Germany’s DAX 30 index added 1.9% to close at 8,886.96, while France’s CAC 40 index climbed 2.3% to 4,081.24. The U.K.’s FTSE 100 index gained 1.7% to close at 6,372.33. Asian stocks followed the lead of US and European markets. The Nikkei Stock Average gained 1.7% after a 2% fall on Tuesday. The Hong Kongs Hang Seng Index was up 0.6% Wednesday, after the government and student leaders negotiated for the first time Tuesday. Elsewhere, Australias S&P/ASX 200 was up 0.8% at 5366.40 and Koreas Kospi was up 0.5% at 1925.19. Oil gained as reports on Chinese economy indicated increased industrial production in the world’s second biggest economy. Brent for December settlement increased 82 cents, or 1 percent, to end the session at $86.22 a barrel on the London-based ICE Futures Europe exchange. Volume was 5.8 percent higher than the 100-day average. The European benchmark closed at a $3.73 premium to WTI for December delivery, up from $3.49 yesterday. Industrial production in China rose 8 percent in September from a year earlier compared with August’s 6.9 percent, according to the National Bureau of Statistics in Beijing. Oil has been falling as major oil producers are increasing production while global demand is falling behind due to slow global economic recovery. Gold held near the highest price in six weeks as purchases surged ahead of Diwali festival and wedding season. Dhanteras, the biggest gold-buying festival in India, was celebrated yesterday. Diwali, the Indian festival of lights celebrated on October 23, is considered a favorable time for buying gold. Researcher CPM Group estimates the holiday generates about a fifth of India’s annual purchases. Bullion for immediate delivery added as much as 0.3 percent to $1,251.90 an ounce and was at $1,249.06 by 2:47 p.m. in Singapore. Experts estimate after the additional support that Indian buyers are providing during the Dhanteras-Diwali season, gold will likely meet resistance at $1,250 to $1,260 short-term, in part due to Indian government gold tariffs imposed to assist in narrowing their current-account deficit.
Posted on: Wed, 22 Oct 2014 12:42:03 +0000
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