NEW YORK – Wall Street stocks edged higher for a third straight session yesterday after a plethora of earnings reports, while leading bourses on the other side of the Atlantic climbed as the European Central Bank (ECB) pledged to keep support in place for longer.
A busy day of US results featured companies from across the economy, with railroad Union Pacific reporting a 30% rise in revenues, while Domino’s Pizza notched higher comparable stores sales despite a tough comparison with the year-ago period when pizza orders soared during pandemic lockdowns.
Briefing.com analyst Patrick O'Hare said most companies reporting scored “positive earnings surprises” and “the good earnings news cut across industry groups and sectors”.
US economic data was mixed, with jobless claims rising unexpectedly, while existing home sales rebounded, snapping a streak of declines as prices set a new record.
The Dow mustered a 0.1% gain to advance for the third straight session after suffering its worst day of 2021 on Monday on worries about the Delta Covid-19 variant and rising inflation.
“The markets appear to be coming to terms with the potential disruption from the global spreading of the Delta coronavirus variant and the likelihood that we may have reached peak earnings and economic growth rates,” said a note from Charles Schwab.
No taper talk in Europe
In Europe, the ECB made it clear that monetary stimulus will keep flowing in the eurozone as concerns grow over economic risks from the fast-spreading variant.
“The euro area economy is rebounding strongly,” ECB chief Christine Lagarde said. “But the pandemic continues to cast a shadow, especially as the Delta variant constitutes a growing source of uncertainty.”
The highly contagious variant – which has forced renewed restrictions in several countries – could dampen the recovery “in services, especially in tourism and hospitality,” she added.
Lagarde said the ECB’s emergency bond purchases will remain in place until at least the end of March 2022, or until the ECB “judges that the coronavirus crisis phase is over”.
Markets in Paris and Frankfurt climbed, while the euro retreated against the US dollar and other major currencies.
“In today’s meeting, the ECB confirmed that they are in no rush to raise interest rates,” said BK Asset Management’s Kathy Lien. “Not only did they avoid any taper talk, which is a sharp contrast to other central banks, they also amended their forward guidance to account for higher inflation tolerance.”
In other markets, oil prices continued to rebound from hefty losses at the start of the week prompted by the agreement among the Organisation of the Petroleum Exporting Countries and its allies to boost output.
In Asia, stock markets closed higher as worries about the coronavirus’ Delta variant were eclipsed by earnings reports that indicated companies were faring well. – AFP, July 23, 2021
