World equity indexes edged down yesterday but were near five-year highs as strong earnings from major US technology companies propelled Wall Street to another day of gains.
The euro dropped from a near two year-high against the dollar, pressured by a survey showing an unexpected fall in German business morale.
Though equity markets in Europe and Asia were weaker, US stocks edged up and the S&P 500 was on track to close at an all-time high as shares of Amazon surged 8.6 per cent and Microsoft rose 5.5 per cent following their quarterly results.
The Dow was also approaching its all-time high, and the Nasdaq touched its highest level in 13 years.
The S&P 500 has gained 23 per cent so far this year, just shy of its 23.5 per cent jump in 2009. Surpassing that level would give the index its biggest annual gain in a decade. The S&P 500 is on track for a third straight week of gains.
“We’ve been positive on Microsoft for a while, but I can’t remember the last time I saw it move up this much after earnings.
“It is very positive, and helping to boost the overall tape today,” said Douglas DePietro, managing director at Evercore Partners in New York.
“Still, the market has been getting tired lately. While I believe we’ll see another leg up soon, it isn’t out of the question that we would need to consolidate near all-time highs.”
MSCI’s world share index, which tracks 45 countries, was down 0.1 per cent but still near a five-year high.
On Wall Street, the Dow Jones industrial average was up 17.00 points, or 0.11 per cent, at 15,526.21. The Standard & Poor’s 500 Index was up 1.39 points, or 0.08 per cent, at 1,753.46. The Nasdaq Composite Index was up 2.03 points, or 0.05 per cent, at 3,930.99.
European equities edged lower, with the pan-European FTSEurofirst300 index down 0.1 per cent. Telecom Italia led the telecoms sector down on concerns about a capital hike by the Italian company, and Volvo’s report of a sharp drop in profit hurt industrials.
In currency markets, the euro lost ground against the dollar after data on eurozone private sector activity suggested the recovery in the eurozone has stalled.
The euro’s decline was not dramatic, falling 0.1 per cent to $1.3795, below an earlier high of $1.3833, not far from a near two-year high touched earlier against a weak dollar.
Soft US jobs and other data this week have bolstered the view the Federal Reserve will not tamper with its huge bond-buying program until well into next year, triggering a drop in the dollar and lifting both shares and bonds.
But a surprise dip in Germany's Ifo business index and soft eurozone lending data yesterday sent a reminder of the bloc's fragility.