News: Tech stocks lead S&P 500 gains
A rebound in technology companies drove stocks to the brink of a record, with traders assessing another batch of economic and earnings reports. Treasuries climbed.
The S&P 500 Index had its biggest three-day advance since April, but gains paled in comparison to the previous two sessions with a 0.20% rise to 4,367.48. The Dow Jones Industrial Average added 0.07% to 34,823.35 while the Nasdaq Composite Index gained 0.36% to 14,684.60.
Giants Apple Inc (AAPL US) and Microsoft Corporation (MSFT US) rallied, while firms closely tied to a broader reopening of businesses underperformed. In late trading, Twitter Inc (TWTR US) jumped after a strong outlook, while Intel Corporation (INTC US) – the world’s biggest semiconductor maker – slid on a lacklustre sales forecast.
Rising earnings expectations have tempered worries over peaking growth and the spread of the delta coronavirus variant that roiled markets at the start of the week. Economic reports were mixed, showing sales of previously owned US homes rose for the first time in five months, while jobless claims unexpectedly climbed.
Earlier Thursday (22 July), equities fell on news that multiple prominent websites were inaccessible to some users.
As earnings continue to roll in, American stocks are regaining a leadership position in world markets. The ratio between the S&P 500 and an S&P Global gauge of shares listed outside the US shows as much. After falling as much as 10.4% between September and February, the ratio rallied to a record on 9 July and again on Tuesday. – Bloomberg News.
Christine Lagarde promised that the European Central Bank (ECB) has learnt from the errors of past crises and would not derail the current economic recovery by withdrawing emergency support too early.
The ECB president spoke Thursday (22 July) as the central bank put into action the new monetary policy strategy it hammered out over the past 18 months. It revised guidance on interest rates, tying policy shifts more tightly to hitting its new 2% inflation goal, and said it would not necessarily react immediately if price growth exceeds that target for a “transitory” period.
The measures reinforce the ECB’s efforts to convince markets that it will keep ultra-loose policy, including record low negative interest rates, in place for as long as needed to revive price stability.
The ECB’s guidance change means that even if inflation is at the target at the end of its forecast horizon -- as much as three years out – it would not be forced to respond with tighter policy. Officials currently foresee price growth averaging just 1.4% in 2023, which suggests any rate hike is years away. – Bloomberg News.
The Stoxx Europe 600 Index rose 0.56% to 456.53.
Japan markets are closed 22-23 July for public holidays.
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