Global stock markets edged higher while US debt prices fell yesterday following unexpectedly low US weekly jobless claims and stronger-than-expected US earnings.
The benchmark S&P 500 index hit a record high for a third straight day, buoyed by data showing initial jobless claims in the world’s largest economy dropped to their lowest in more than eight years.
The biggest boost to the index came from Facebook, which shot up 6.8 per cent to $76.17 and hit a record of $76.74, a day after reporting a surge in mobile advertising revenue.
“The lower-than-expected US initial jobless claims has made people focus on the improving labour market situation,” said Ian Lyngen, senior government bond strategist, at CRT Capital in Stamford, Connecticut.
But data showing sales of new US single-family homes fell by the biggest amount since July 2013 offset some of the positive news.
The stock of home builder D.R. Horton, which also reported results, sank 9.3 per cent to $22.50, while the PHLX Housing Index was down 2.1 per cent.
General Motors dropped 3.3 per cent to $36.17 after reporting a much smaller-than-expected quarterly profit.
Other data showed the services sector across the 18-member eurozone performed better than any of the 39 economists polled by Reuters had forecast.
Russian debt insurance costs rose after European Union leaders proposed sanctions on Russian banks which are majority-owned by the government. Those measures were proposed after a Malaysian Airlines plane was downed over Ukraine last week, killing 298, by a missile likely furnished by Russia.
MSCI’s All-World Index was up 0.2 per cent, while European stocks .FTEU3 were up 0.5 per cent.
The Dow Jones industrial average rose 12.07 points or 0.07 per cent, to 17,098.7, the S&P 500 gained 3.53 points or 0.18 per cent, to 1,990.54 and the Nasdaq Composite added 8.66 points or 0.19 per cent, to 4,482.36.
A better-than-expected US earnings season is helping sentiment. So far this earnings period, 68.5 per cent of earnings reports have beat analysts’ expectations.
Drugmakers Bristol-Myers Squibb and Eli Lilly beat Wall Street expectations, along with Ford.
In the foreign exchange market, the euro fell to an eight-month low of $1.3448 in early European trading on the EBS trading system before rebounding to a session high of $1.34855 . The single currency was last $1.3471, up 0.05 per cent from Wednesday’s US close.
Ten-year US Treasuries were down 13/32 in price to yield 2.508 per cent. The yield hit a peak of 2.518 per cent, the highest since July 18.
Crude oil prices ran into renewed selling after a bounce on Wednesday. Brent crude for September delivery fell 66 cents to $107.37 a barrel. US crude lost 48 cents to $102.64.