MARKET OVERVIEW. The release of strong financial results in the United States helped North American stock markets finish higher on Tuesday as investors welcomed signs that economic growth may not be as bad as expected.
The New York Stock Exchange ended positively, supported by corporate earnings and a weaker dollar as the European Central Bank (ECB) prepares for tighter monetary policy.
Consult market news (again).
Stock market indices at close of trading
In Toronto, the S&P/TSX closed up 342.09 points (+1.84%) at 18,937.71 points.
In New York, the S&P500 rose by 105.84 points (+2.76%) to 3,936.69 points.
the Nasdaq rose by 353.10 points (+3.11%) to 11,713.15 points.
the DOW increased by 754.44 points (+2.43%) to 31,827.05 points.
the loons returned $0.0067 (+0.8641%) to $0.7770.
the oil rose $1.25 (+1.22%) to $103.85.
L’gold fell $0.50 (-0.03%) to $1,709.70.
the Bitcoin rose $1,842.29 (+8.52%) to $23,465.78.
US stocks ended “significantly higher as Wall Street prices in a spate of corporate earnings reports,” analysts at Wells Fargo said, also noting the greenback’s decline.
“The US dollar weakened in part on a stronger euro, fueled by speculation that the ECB could hike rates by more than 50 basis points,” they said.
For Cresset Capital’s Jack Ablin, the falling dollar was indeed “good news” for the stock market. As of 4:00 p.m. Quebec time, the euro is up 0.87% against the greenback to $1.0231 for €1 versus 1.0143 the previous day.
“It looks like the ECB is going to be more aggressive. I think that was part of the excitement on Wall Street because the greenback may stop rallying as much as it has, the analyst told AFP as the U.S. currency is up about 13% since the start of the year .
The dollar’s decline “was fueled by a small change in monetary policy between the ECB and the Fed,” the analyst said.
Indeed, the European Central Bank is joining the US Federal Reserve’s march by planning monetary tightening for Thursday, the first in more than a decade, while the Fed has been tightening monetary policy since the spring.
A number of company results have also interested investors, “although we’ll have to wait for news from other sectors before we can draw any conclusions,” Mr Ablin said.
All sectors in the green area
Stock market megacaps like Apple (AAPL, $151, +2.67%) and Google (GOOGL, $113.81, +4.38%) Gained momentum after its slump on Monday, sparked by reports that Apple would slow hiring amid fears of a slowdown in activity.
Twitter (TWTR, $39.49) up 2.81% as the legal standoff with Elon Musk began with an initial hearing that heralded the start of a trial in October. The social network wants to force the boss to do so You are here (TSLA, $736.59, +2.07%) to honor its commitment to acquire it for $44 billion.
On the results front Netflix announced stronger-than-expected quarterly earnings per share and, most importantly, a lower subscriber loss (nearly 1 million vs. more than 2 million expected) after the market close. Although sales rose to $7.97 billion, they fell short of expectations.
The action of Netflix (NFLX, $201.63) which closed up 5.61% still gained almost 8% in electronic trading after the close.
Among the announcements of quarterly financial statements, the American laboratory Johnson&Johnson (JNJ, $171.69, -1.45%) released second quarter results that beat expectations.
IBM (IBM, $130.88, -5.28%) lamented the dollar’s strength in the second quarter despite better-than-expected results that were reported at the close on Monday.
The S&P’s 11 sectors ended in the green, with Communication Services (+3.63%) and Industrials leading the way (+3.58%). The energy sector was also up more than 3%, while the barrel of black gold offered a fourth session of gains.
Investors were undeterred by dismal data from the housing market, which is highly sensitive to rising interest rates, where housing starts fell 2% to a nine-month low in June.
“There’s a chance we’ll have a recession by the middle of next year, maybe we’re even having it right now,” Jack Ablin said. “But I think investors are ready to look beyond the tightening cycle to the year after,” the analyst said.