US stocks rose yesterday buoyed by strong economic data from Europe, while investors bought a flurry of new public offerings one day ahead of Twitter’s much-anticipated IPO.
German industrial orders rose by more than expected, which is significant as the country is the economic engine of the eurozone.
“All told, it’s been a pretty good morning – you have had strong overseas data,” said Dan Greenhaus, chief strategist at BTIG in New York. Dutch banking and insurance group ING helped European equities set a five-year high after the company’s earnings beat expectations.
Greenhaus also noted recent statements from US central bankers that point to an extended period of accommodative central bank policy. New research from Federal Reserve economists makes the case for more aggressive action by the US central bank to drive down unemployment.
Microsoft Inc had the biggest positive influence on the S&P 500 after Reuters reported that the company narrowed its CEO search to about five people. The shares rose $1.35, or 3.7 per cent, to $37.99. The stock touched its highest level since June 2001 earlier in the session.
The Dow Jones industrial average rose 88.17 points or 0.56 per cent, to 15,706.39, the S&P 500 gained 4.69 points or 0.27 per cent, to 1,767.66 and the Nasdaq Composite dropped 9.129 points or 0.23 per cent, to 3,930.735.
Tesla Motors Inc shares slumped 13.3 per cent to $153.02 after the electric car maker forecast a weaker-than-expected fourth-quarter profit and its third-quarter Model S deliveries disappointed some analysts. Shares are up 350 percent for the year, and the stock has been a target of short-sellers who see it as overvalued.
The equity market also saw support from a host of initial public offerings, with six new issues starting to trade yesterday, a day ahead of Twitter’s IPO. Barracuda Networks Inc shares jumped 26.3 percent to $22.7 on its first trading day.
According to Thomson Reuters data, if all 13 scheduled IPOs price this week, it will be the busiest week of the year in terms of number of primary issues since September 2007.
“One of the barometers for the health of market conditions we look at is the ability for the market to absorb a large amount of IPOs,” said Art Hogan, managing director at Lazard Capital Markets in New York.
Ralph Lauren Corp shares advanced 3.7 per cent to $177.52 after the designer clothing company raised the lower end of its full-year sales forecast on the expectation of strong gains during the holiday quarter, and increased its dividend.