North American stocks were up substantially in midday trading on Tuesday, boosted by strong earnings and a comment from a U.S. Federal Reserve official that the central bank should provide “open ended” stimulus to the economy.
At noon, the Dow Jones industrial average was up 86 points or 0.7 per cent, to 13,203. The broader S&P 500 was up 12 points or 0.8 per cent, to 1406. In Canada, the S&P/TSX composite index was up 184 points or 1.6 per cent, to 11,846.
The moves continue a recent winning streak for stocks, and put the S&P 500 at its highest level since May. European stocks also rallied: The U.K.’s FTSE 100 rose 0.6 per cent and Germany’s DAX index rose 0.7 per cent.
Part of the enthusiasm is flowing from a reaction to comments from the president of the Reserve Bank of Boston, Eric Rosengren, who commented on CNBC that the Fed should give the economy a boost by providing an easing program of “substantial magnitude.”
Last week, the Fed stayed relatively quiet on the subject of economic stimulus, despite noting in its monetary policy statement that economic activity had “decelerated” in the first half of the year.
Meanwhile, despite a lacklustre earnings season so far, some companies shone on Tuesday.
Apparel maker Fossil Inc. surged 32.5 per cent after reporting that its quarterly sales rose 14.3 per cent and its net incomes rose 11.6 per cent.
Chesapeake Energy Corp. rose 10.2 per cent after reporting a 91 per cent rise in its quarterly earnings and provided an update on asset sales as the company pays down debt and unloads “non-core” assets.
Within the S&P 500, energy stocks showed the biggest gains, rising 1.6 per cent. Industrials rose 1.3 per cent and materials rose 1.2 per cent. However, economically defensive areas of the market, such as consumer staples, health care and telecom services, fell.
Within Canada’s benchmark index, commodity producers showed the biggest gains: Materials rose 2.4 per cent and and energy stocks rose 2.1 per cent. Financials rose 0.9 per cent.
Among commodities, crude oil rose to $93.47 (U.S.) a barrel, up $1.27 to its highest level since May.