Global equity markets rose yesterday, powered by solid US corporate earnings and deal-making activity among European drugmakers, while the euro edged above break-even.
On Wall Street, the S&P 500 and the Nasdaq were on track for a sixth straight session of gains, led by gains in technology shares. In Europe, an index of top European shares finished up 1.3 per cent, the biggest daily gain since early March.
Netflix Inc, the video streaming company, surged 5.5 per cent to $367.74 a day after it reported quarterly results that showed strong subscriber growth, a sign the company’s shares could continue to rise despite valuation concerns.
One-fifth of the companies in the S&P index have reported first-quarter earnings so far, of which 63 per cent beat analysts expectations. The rate is in line with a 20-year average but down from the 66 per cent average of the past four quarters.
Shares of social media companies gained after Credit Suisse upgraded its recommendation on Facebook Inc to “outperform.” Facebook rose 2.7 per cent to $62.89.
The Global X Social Media Index ETF rose 1.2 per cent, with Twitter Inc up 1.7 per cent, LinkedIn Corp up 1.5 per cent and Yelp Inc up 1.2 per cent.
The Dow Jones industrial average rose 107.5 points, or 0.65 per cent, to 16,556.75. The S&P 500 gained 11.3 points, or 0.6 per cent, to 1,883.19, and the Nasdaq Composite added 42.562 points, or 1.03 per cent, to 4,164.108.
MSCI’s all-country stock index rose 0.59 per cent, while the FTSEurofirst 300 index of top European shares closed up 1.34 per cent at 1,346.57 points. AstraZeneca jumped 4.7 per cent in London after the Sunday Times newspaper reported Pfizer approached its British rival with a 60 billion pound ($101 billion) takeover offer. Pfizer rose 1.2 per cent to $31.23.
GlaxoSmithKline rose 5.2 per cent after it agreed to sell its oncology products to Novartis for $14.5 billion, while buying the Swiss firm’s vaccines, excluding flu. Novartis’ shares were up 2.3 per cent.
Investors trimmed their positions of US dollars after a two-week run higher, unmoved by data on US existing home sales for March that beat expectations but showed a modest decline from the prior month. The euro gave up some of its modest gains, but remained slightly positive against the greenback and yen.
The euro slipped to a two-week low of $1.3783 at one point, before trading 0.08 per cent higher at 1.3802.
ECB executive board member Benoit Coeure said yesterday that there was further margin to reduce the main interest rate below 0.25 per cent and that the strength of the euro could be keeping inflation too low.
But until the ECB takes action, traders said the euro was unlikely to weaken much, thus keeping it tied to a range.
The dollar edged lower at 102.59 yen.
Brent oil fell and the US benchmark posted a sharper decline on forecasts of rising crude stocks, but a faltering pact to ease tensions in Ukraine offered some support.
Brent crude was down 88 cents at $109.07 a barrel, after reaching a six-week high of $110.36 last week. US crude slipped $2.15 cents to $102.22 a barrel.