October 23, 2014
US stocks surge on earnings; Nasdaq +1.6%
Caterpillar rallied after reporting a quarterly profit that soared past estimates; 3M (MMM) jumped after the diversified manufacturer posted higher quarterly profit, and General Motors (GM) also tallied a better-than-expected profit in the third quarter.
“It’s earnings. When we started the day the Dow was still down on the year, then you saw Caterpillar and GM come out with good news,” said Chris Gaffney, senior market strategist, Everbank Wealth Management, referring to the Dow’s return to the black for 2014.
The volatility of last week could be interpreted as a sign that investors are worried about whether the U.S. economy can stand on its own, once the Federal Reserve pulls the plug on bond purchases, otherwise known as quantitative easing, said Gaffney. “This week, these earnings show perhaps it will.”
On Thursday, the CBOE Volatility Index (^VIX), a measure of investor uncertainty, fell nearly 11 percent to 15.99.
Thursday’s economic reports had the four-week average of Americans filing for jobless benefits dropping to a 14-year low.
The Conference Board’s index of leading indicators for September increased 0.8 percent.
Surveys had euro-area businesses performing far better than expected in October, along with a slight expansion in China’s manufacturing sector.
Rising as much as 277 points, the Dow Jones Industrial Average (Dow Jones Global Indexes: .DJI) was lately up 274.05 points, or 1.7 percent, to 16,735.37, with 3M, Caterpillar and oil-producerChevron (CVX) leading blue-chip gains that extended to 26 of 30 components.
The S&P 500 (^GSPC) advanced 30.24 points, or 1.6 percent, to 1,957.35, with energy and industrials leading gains among its 10 main sectors and telecommunications the sole laggard.
The Nasdaq (^IXIC).rallied 78.58 points, or 1.8 percent, to 4,461.47.
For every share falling, roughly six gained on the New York Stock Exchange, where 228 million shares traded by 11:15 a.m. Eastern. Composite volume neared 1.2 billion.
The 10-year Treasury note (U.S.:US10Y) yield, used in determining rates on mortgages and other consumer loans, jumped 5 basis points to 2.272 percent.
The U.S. dollar (Exchange:.DXY) edged higher against the currencies of major U.S. trading partners and dollar-denominated commodities were mixed.
On the New York Mercantile Exchange, December gold futures (CEC:Commodities Exchange Centre: @GC14Z) fell $18.00, or 1.5 percent, to $1,227.50 an ounce, and crude-oil futures (New York Mercantile Exchange: @CL14Z) for December rose $1.60, or 1.7 percent, to $82.12 a barrel.
On Wednesday, U.S. stocks turned lower, following the S&P 500’s biggest jump in a year, as investors considered the fatal shooting of a soldier in Ottawa, reports of gunfire in the halls of Canada’s Parliament and oil falling to a more-than two-year low.
Coming Up This Week:
Earnings: Bristol-Myers Squibb, Colgate-Palmolive, Ford, UPS, Procter and Gamble, Nasdaq, Delphi Automotive, State Street, Ericsson, Shire
10:00 a.m.: New home sales
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