U.S. stocks rallied on Thursday, with the Nasdaq closing at a record, as a round of solid earnings led by American Express pushed equities higher.
The credit card company closed up 5.9 per cent as the top boost to the Dow Industrials after reporting a smaller-than-expected drop in quarterly profit late Wednesday.
CSX Corp, up 5.6 per cent, was one of the best performers on the S&P 500 after the railroad reported a better-than-expected quarterly net profit driven by rising freight volumes and said it plans to cut costs and boost profitability moving forward.
“You need a catalyst to go higher and the only one that is out there to me that is logical and would drive the market higher is earnings, and so far it is OK,” said Phil Blancato, CEO of Ladenberg Thalmann Asset Management in New York.
“You look at a day like today and it tells you there is a lot of cash on the sidelines that wants an opportunity to buy when the market sells off even just a little bit.”
Major indexes have fallen for two straight weeks, retreating from record levels as worries about President Donald Trump’s ability to deliver on his pro-growth promises raised some concern about stretched stock valuations.
Mounting tensions between North Korea and the United States, as well as the looming French presidential elections, also served to heighten investor caution. Recent polls showed centrist Emmanuel Macron hung on to his lead in a four-way French race that is too close to call.
Of the 82 companies in the S&P 500 that have reported earnings through Thursday afternoon, about 75 per cent have topped expectations, according to Thomson Reuters data, above the 71-per-cent average for the past four quarters.
Overall, profits of S&P 500 companies are estimated to have risen 11.1 per cent in the quarter, the best since 2011.
The Dow Jones Industrial Average rose 174.22 points, or 0.85 per cent, to 20,578.71, the S&P 500 gained 17.67 points, or 0.76 per cent, to 2,355.84 and the Nasdaq Composite added 53.74 points, or 0.92 per cent, to 5,916.78.
The S&P 500 closed just below its 50-day moving average, a level that had acted as resistance after the index fell below it last week.
Philip Morris fell 3.5 per cent to $109.98 as the biggest drag to the benchmark S&P index after the tobacco maker’s first-quarter profit forecast fell below estimates.
Canada’s main stock index rose on Thursday as Canadian Pacific Railway Ltd jumped on an earnings beat and as many financial shares also gained.
Canadian Pacific was the most influential gainer on the index, adding 2.6 per cent to $207.26 after it reported higher-than-expected quarterly profit as it earned more from shipments of commodities such as grain and coal, and expressed optimism that demand was improving.
Its rival, Canadian National Railway Co, rose 1.7 per cent to $100.36.
The Toronto Stock Exchange’s S&P/TSX composite index was up 72.86 points, or 0.47 per cent, at 15,625.56. Eight of its 10 main groups gained.
The euro and stocks on major markets recovered on Thursday as a market-friendly presidential candidate held the lead ahead of Sunday’s first-round election in France, while the yen and U.S. Treasury debt prices weakened.
Former French finance minister, Emmanuel Macron, remained atop the polls for Sunday’s French vote, but the election is still a four-way battle in the first round on April 23. Should Mr. Macron rank first or second in Sunday’s poll, he is seen easily winning the runoff vote on May 7 after remaining candidates are eliminated.
However, after surprises in last year’s U.S. election and the UK Brexit referendum, voter indecision and low turnout could catch markets wrong-footed yet again.
France’s CAC stock index jumped 1.5 per cent, its strongest daily performance since March 1.
The pan-European FTSEurofirst 300 index ended up 0.2 per cent and MSCI’s gauge of stocks across the globe gained 0.62 per cent.
Emerging market stocks rose 0.55 percent.
Currency traders said short-term players were closing out positions taken in anticipation of euro weakness before the French election, emboldened by the steady stream of polls confirming that centrist Macron would lead returns on Sunday.
“Short euro is still one of the larger positions out there. No risk on the table means take some of that off,” said BMO strategist Stephen Gallo.
“(But) there is still no fundamental reason for the euro to be rising here.”
The U.S. dollar index rose 0.04 per cent, with the euro up 0.1 per cent to $1.072.
The Japanese yen weakened 0.39 per cent versus the greenback at 109.31 per dollar, while Sterling was last trading at $1.2809, up 0.25 per cent on the day.
Oil prices fell further after Wednesday’s steep losses, with rising U.S. production weighing against comments from leading Gulf oil producers that an extension to OPEC-led supply cuts was likely.
U.S. crude fell 0.22 per cent to $50.74 per barrel and Brent was last at $53.02, up 0.17 percent on the day.
U.S. Treasury yields rose as investors waited on the results from the French election, after the 10-year yield earlier failed to break below key technical resistance at 2.19 per cent.
Benchmark 10-year notes last fell 10/32 in price to yield 2.2356 per cent, from 2.202 percent late on Wednesday.
Spot gold added 0.1 per cent to $1,280.66 an ounce. U.S. gold futures fell 0.05 per cent to $1,282.70 an ounce.
Copper rose 1.43 per cent to $5,635.50 a tonne.
- American Express Co$82.75+0.53(+0.64%)
- Morgan Stanley$43.73+0.03(+0.08%)
- Crude Oil Front Month Futures$42.79-0.22(-0.51%)
- Gold Front Month Futures$1,245.00-11.20(-0.89%)
- S&P/TSX Composite15,271.25-48.31(-0.32%)
- S&P 500 INDEX2,440.27+1.97(+0.08%)
- NASDAQ NMS COMPOSITE INDEX6,250.55-14.70(-0.23%)
- Canadian National Railway Co$106.85+0.26(+0.24%)
- Canadian Pacific Railway Ltd$210.13-1.12(-0.53%)
- Exxon Mobil Corp$81.15-0.46(-0.56%)
- Chevron Corp$104.48-0.52(-0.50%)
- Philip Morris International Inc$119.89+0.33(+0.28%)
- Dow Jones Industrials21,409.81+15.05(+0.07%)
- Updated June 26 10:30 AM CDT. Delayed by at least 15 minutes.