Traders work by the post that trades Baker Hughes on the floor of the New York Stock Exchange Nov. 17, 2014.Brendan McDermid/Reuters
North American stocks fluctuated, with the S&P 500 Index within striking distance of an all-time high, amid a mix of corporate results as investors await data Friday on the strength of the U.S. economy. Stimulus bets influenced currency markets ahead of the Bank of Japan's policy meeting.
Traders have whipsawed currencies from the yen to the pound this week on speculation over additional stimulus. They'll get more data in the next 24 hours, as the BOJ is expected to expand a record program, while Europe will announce results of the latest stress tests for banks before investors get their first glimpse of U.S. gross domestic product in the second quarter. Earnings from Alphabet Inc. to Amazon.com Inc. are due after U.S. trading closes.
"People are waiting for a catalyst to get us moving again," John Stoltzfus, chief market strategist at Oppenheimer & Co. in New York, said by phone. "People are waiting to see what's next in line. The market is digesting all the activity it's had to face from a geopolitical point of view, a macro economic point of view as well as digesting this current earnings season."
Canadian stocks struggled for direction, with the benchmark index poised for a monthly gain, as investors assessed a raft of corporate results.
The S&P/TSX Composite Index rose 0.04 per cent, or 6.18 points, to 14,552.72 in Toronto, pushing its gain in July to 3.5 per cent. The benchmark is up 12 per cent in 2016, one of the best gains among developed markets this year. The rally has made Canadian stocks more expensive than their U.S. peers, with a price-earnings ratio of 22.3 for the S&P/TSX, about 11 per cent higher than the S&P 500 Index.
Fertilizer producer Potash Corp. of Saskatchewan tumbled 7.2 per cent, the most in a month, after slashing its dividend on disappointing earnings. That was the biggest loss among materials producers, which fell 0.6 per cent as a group. Miners First Quantum Minerals Ltd. and Teck Resources Ltd. surged more than 6 per cent to pace gains.
The S&P 500 rose 0.2 per cent to 2,170.01 in New York, 0.2 per cent below the 2,175.03 all-time high set July 22. The index has added more than 3 per cent in July, though it's been in a rare holding pattern for the past two weeks. Since the S&P 500 Index hit the fourth straight all-time high on July 14, the benchmark gauge has alternated between gains and losses, finishing every day less than 0.5 per cent from the previous close. The 10-day streak is the longest since data began in 1927
"Earnings have been the story, and that story is getting a little long in tooth," said Jim Davis, regional investment manager for Private Client Group at U.S. Bank in Springfield, Ill. "We need something really positive to break out to the upside but at the same token, it's hard to walk away which is why we're not seeing a bad sell off."
The main gauge for U.S. stocks has rallied 8 per cent since June 27, two days after the U.K.'s secession vote roiled global markets. The index slipped on Wednesday amid earnings reports and a drop in oil. The Fed's reiteration that it is in no rush to raise interest rates amid tepid inflation weighed on the dollar, which bolstered shares of companies whose fortunes are tied to sales abroad.
While the prospects for additional central-bank support bolstered equities, better-than-forecast economic data and corporate earnings that broadly beat projections have also helped lift the S&P 500 this month. The gauge posted seven records in 10 days in a midmonth stretch, and it's rebounded 18 percent since its low in February. It's up 6 per cent this year -- one of the best gains in developed-world equities.
With the earnings season almost half way through, more than 80 per cent of S&P 500 companies have posted profit that beat projections, while almost 60 per cent topped sales estimates. Analysts have eased their expectations for a drop in second-quarter net income to 4.5 per cent.
The Stoxx Europe 600 slid 1 per cent. The gauge is 2 per cent from its June 23 level, the day of the U.K.'s EU referendum, while U.S. and Asian shares have already recovered from their losses. Banks fell the most among Stoxx 600 industry groups. Banca Popolare di Milano Scarl, Deutsche Bank AG and Banco Popular Espanol SA declined more than 3 per cent, with the latest stress-test results to be released on Friday.
The Bloomberg Dollar Spot Index, a gauge of the greenback against 10 major peers, lost 0.1 per cent. Against the euro, the U.S. currency was headed for its biggest two-day slide since June 23, the day of the U.K. referendum on its membership of the European Union.
"We're seeing broad dollar weakness," said Yuji Kameoka, the chief foreign exchange strategist at Daiwa Securities Co. in Tokyo. "Even though the Fed did note some improvements in the economy, a rate hike in September still isn't certain."
The yen climbed 0.6 per cent to 104.74 per dollar after dropping 0.7 per cent on Wednesday. A majority of economists polled by Bloomberg predict the BOJ will boost asset purchases on Friday and lower the already negative key rate.
The pound slipped against all of its 16 major counterparts with swaps trading indicating that the Bank of England is certain to cut its key interest rate rate next week. Sterling dropped 0.7 per cent to $1.3131.
Oil fell to a three-month low, edging closer to a bear market, after U.S. crude supplies unexpectedly rose from what was already the highest seasonal level in at least two decades.
Futures dropped 1.9 per cent in New York. Crude inventories climbed for the first time since May last week as output rose, the Energy Information Administration said Wednesday. A Bloomberg survey had forecast a stockpile decline. Refineries cut processing volumes during the peak-demand summer driving season amid swelling gasoline supplies and weak profit margins.
"Gasoline stocks are high, which is weighing on prices and margins," said Michael Wittner, the New York-based head of oil-market research at Societe Generale SA. "Refinery crude demand is falling now for economic reasons and will only go lower as seasonal maintenance starts."
Oil is near the 20-per-cent drop from early June that would characterize a bear market. The recovery driven by supply disruptions that saw prices almost double from a 12-year low reached in February has petered out amid renewed concerns about the strength of demand. Oil producers including BP Plc, Royal Dutch Shell Plc and Total SA reported sharp declines in second-quarter earnings as lower crude prices continued to take their toll.
West Texas Intermediate for September delivery fell 78 cents to settle at $41.14 a barrel on the New York Mercantile Exchange. It's the lowest close since April 19.
Brent for September settlement, which expires Friday, fell 77 cents, or 1.8 per cent, to $42.70 a barrel on the London-based ICE Futures
Industrial metals advanced. Nickel added 1.7 per cent while copper rose 0.8 per cent. Iron ore made a comeback as Chinese steel mills increased production. Futures on the Dalian Commodity Exchange closed 1.4 per cent higher at 472.5 yuan ($70.9) a metric ton, the highest since the peaks reached during the speculative frenzy in April.
Gold futures gained 0.8 per cent to $1,345 an ounce.