A measure of global equity markets advanced yesterday after technology earnings lifted US shares and the prospect of European Central Bank corporate bond purchases boosted European stocks and weighed on safe-haven US Treasuries prices.
A rally in shares of Apple Inc and Texas Instruments Inc after stronger-than-expected quarterly earnings reports lifted the tech-heavy Nasdaq index over one per cent and helped put the S&P 500 on track for a fourth straight session of gains, while European shares gained on a Reuters report that the ECB was readying a plan to buy corporate bonds.
The Dow’s gains were limited, however, following disappointing results from Coca-Cola.
US corporate earnings season will ramp up this week, with nearly 130 S&P 500 companies scheduled to report.
“This was strong across all sectors, and Apple gave a good guidance. Any fund manager who is underweight on Apple is probably rethinking that position today,” said Michael Binger, senior portfolio manager at Minneapolis-based Gradient Investments, which owns Apple stock.
US data yesterday showed existing home sales rose 2.4 per cent in September to an annual rate of 5.17 million units, the strongest reading since September 2013.
The report that the ECB is considering buying corporate bonds sparked a rally in the shares of peripheral European countries and led the broader gains in European stocks. The news also sent low-risk US Treasuries prices lower and hurt the euro.
“It increases the potential scale of the purchases the ECB will be able to make if they extend out into the corporate bond market,” said Lee Hardman, a strategist with Bank of Tokyo-Mitsubishi in London.
Official data showing China’s gross domestic product grew 7.3 per cent in the third quarter from a year earlier, marking the weakest growth since the first quarter of 2009, weighed on Chinese shares and stoked concerns over global economic growth.
MSCI’s all-country world index was last up one per cent at 403.9, while the FTSEurofirst 300 index of top European shares added 1.91 per cent to 1,297.03.
The Dow Jones industrial average was up 0.61 per cent at 16,500.22, while the S&P 500 was up 1.25 per cent at 1,927.81 and the Nasdaq Composite added 1.58 per cent to 4,384.34.
The dollar index, which tracks the greenback versus a basket of six currencies, rose 0.36 per cent to 85.259. Benchmark 10-year US Treasury notes were last down 7/32 to yield 2.21 per cent.
Brent crude was last up $0.11, or 0.14 per cent, at $85.51 a barrel. US crude was last up $0.29, or 0.35 per cent, at $83 per barrel.