· Wall Street rallies on vaccine bets, Goldman results
U.S. stocks ended sharply higher on Wednesday, with the S&P 500 at its highest since early June, following promising early data for a potential COVID-19 vaccine and a strong quarterly report from Goldman Sachs.
The Dow Jones Industrial Average rose 0.85% to end at 26,870.03 points, while the S&P 500 gained 0.91% to 3,226.55.
The Nasdaq Composite climbed 0.59% to 10,550.49.
Goldman Sachs on Wednesday reported blowout second-quarter earnings as its reliance on trading and investment banking paid off amid the market turbulence caused by the coronavirus pandemic.
The bank said it generated $2.42 billion in profit, or $6.26 a share, crushing the $3.78 a share estimate of analysts surveyed by Refinitiv. It was the New York-based bank’s biggest earnings outperformance in nearly a decade.
Revenue of $13.3 billion was more than $3.5 billion higher than the estimate, fueled by strong results in its trading and investment banking divisions, which made up three-quarters of the firm’s revenue in the period.
Goldman shares climbed 1.5%, moderating earlier gains of 5.5%, after management said that trading activity had slowed down in recent weeks.
“The Moderna news woke everybody up again that this is not going to last forever, and there is light at the end of the tunnel. That is why you are seeing such a strong move today into those economically sensitive stocks,” said Tim Ghriskey, Chief Investment Strategist Inverness Counsel in New York.
Adding to investors’ enthusiasm, the Federal Reserve’s Beige Book survey showed U.S. businesses saw an uptick in activity into the beginning of July as states eased restrictions to contain the novel coronavirus pandemic.
However, the United States has failed to control the coronavirus and there is a high level of uncertainty over how much the pandemic will affect the economy, Philadelphia Federal Reserve Bank President Patrick Harker said, as a number of U.S. sunbelt states reported a surge in COVID-19 cases recently.
Near the end of the trading session, U.S. President Donald Trump said his administration had completed a top to bottom overhaul of the infrastructure approval process.
· Dow futures little changed as index tries for fifth straight day of gains
Stock futures were little changed in overnight trading on Wednesday as earnings season gets underway, giving investors a clearer picture of the overall health of corporate America.
Futures on the Dow Jones Industrial Average rose 4 points, pointing to a 20-point gain at Thursday’s open. S&P 500 futures fell 0.04%, while Nasdaq 100 futures slipped 0.4%.
Investors will monitor another batch of corporate earning results on Thursday, including from Bank of America and Morgan Stanley.
· European stocks close higher on coronavirus vaccine hopes; Burberry down 5%
European stocks closed higher on Wednesday amid elevated hopes for a coronavirus vaccine.
The pan-European Stoxx 600 index provisionally closed 1.9% higher, with travel and leisure shares surging 5.9% to lead gains as all sectors and major bourses traded in positive territory.
· Asia Pacific stocks little changed ahead of China’s GDP release; SMIC set to make Shanghai debut
Stocks in Asia Pacific were little changed in Thursday morning trade as investors await the release of a slew of Chinese economic data expected later in the day.
In Japan, the Nikkei 225 dipped 0.32% in early trade while the Topix index was fractionally lower. South Korea’s Kospi shed 0.17%.
Over in Australia, the S&P/ASX 200 hovered above the flatline.
Overall, the MSCI Asia ex-Japan index traded 0.08% lower.
Investors await the release of a set of Chinese economic data, including the country’s second quarter GDP growth rate as well as industrial production for June, expected to be out around 10:00 a.m. HK/SIN. The data releases will be watched for clues on China’s economic recovery from the coronavirus.
Meanwhile, China’s largest chipmaker SMIC is also set to make its widely anticipated debut in Shanghai on Thursday. The contract semiconductor manufacturer is seen as an important player in China’s ambitions to become more self-sufficient when it comes to chips.
Reference: CNBC, Reuters
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