The stock markets in the United States rebounded driven by investors’ speculation that central banks would implement additional stimulus. The markets also benefited from positive earnings estimates and the increase of consumer confidence.

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The European Central bank (ECB) is expected to start purchasing assets under its new program “within the next days to support the economy, according to Benoit Coeure, an executive board member.

Yesterday, St. Louis Federal Reserve Bank President James Bullard stated that policy makers should consider postponing their plan to end of the bond-buying program to stop the decline of inflation expectations. He said, “I think that a logical response at this juncture may be to delay the end of QE.”

Meanwhile, the consumer confidence in the United States increased to 86.4 in October based on Thomson Reuters/University Michigan preliminary sentiment index. It was the highest increase since July 2007.

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In a telephone interview with Bloomberg, Jonh Canally, economic strategist at LPL Financial commented, “The market has a buy-the-dip mentality right now.  He added that investors was convinced to buy again due to the “disconnect between the sharp market drops and pretty good U.S. fundamentals” this week.

On the other hand, Virginie Robert, co-founder of Constance Associes in Paris said, “The market was clearly oversold and today’s gains are just a rebound. Central banks can provide more support but they can’t do everything. A good earnings season could give us the confidence that the market needs.”

U.S. Markets

  • Dow Jones Industrial Average (DJIA) – 16,380.34 (+1.63%)
  • S&P 500- 1,886.34 (+1.63%)
  • NASDAQ- 4,258.44 (+0.97%)
  • Russell 2000- 1,083.72 (-0.22%)

European Markets

  • EURO STOXX 50 Price EUR- 2,962.24 (+3.05%)
  • FTSE 100 Index- 6,310.29 (+1.85%)
  • Deutsche Borse AG German Stock Index DAX- 8,850.27 (+3.12%)

Asia-Pacific Markets

  • Nikkei 225- 14,532.51 (-1.40%)
  • Hong Kong Hang Seng Index- 22,023.21 (+0.53%)
  • Shanghai Shenzhen CSI 300 Index- 2,441.73 (-0.11%)

Stocks in Focus

The stock price of General Electric Company (NYSE:GE) gained 2.35% to $24.82 per share after the company reported better than expected earnings for the third quarter. The company posted operating earnings of $0.38 per share, up 6% and $36.2 billion in revenue for the quarter.

Morgan Stanley (NYSE:MS) rose 2.12% to $32.22 per share after positive results for the third quarter and its trading revenue climb at the fastest rate on Wall Street. Its assets under management increased 0.5% to $398 billion as of September 30.

Urban Outfitters, Inc (NASDAQ:URBN) declined 14.29% to $29.62 per share after Goldman Sachs analysts Lindsay Drucler downgraded her rating for the stock to Neutral and reduced her price target to $31 per share.

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