The stock markets in the United States climbed driven by signals of additional stimulus from the European Central Bank (ECB) and better-than-expected earnings from companies including eBay and McDonald’s.
Today, EBC President Mario Draghi said policymakers will study new stimulus measures to help the economic growth including options to reduce the deposit rate further.
During a press conference in Malta, Draghi said there was a “rich discussion” regarding measures to boost the economy, a sign that the ECB could implement new stimulus before the end of the year.
“The degree of monetary-policy accommodation will need to be reviewed at our December meeting when new macroeconomic projections will be available, We want to be vigilant, as people used to say in the old times,” said Draghi.
Bloomberg noted that Draghi’s predecessor Jean-Claude Trichet used the word “vigilant” to signal that policy changes are upcoming.
Ken Wattret, chief euro-zone market economist at BNP Paribas commented, “The communication at the press conference was as dovish as it could have possibly been without announcing more policy easing at this meeting; message received and understood. Eyes down for action on Dec. 3 — it’s merely a question of the form it takes.”
On the other hand, John Praveen, chief investment strategist at Prudential International Investments, said, “Today’s rally is definitely being driven by what the ECB did. That’s what’s really driving this rally and today’s risk-on environment. Earnings expectations were very, very low, and it’s been easy to beat those expectations and that’s also been contributing to this rally.”
Meanwhile, the National Association of Realtors (NAR) reported that the sales of previously-owned homes increased 4.7% to annual rate of 5.55 million units, a sign that the U.S. housing market recovery continues to improve and support the country’s economy.
- Dow Jones Industrial Average (DJIA) – 17, 489.16.34 (+1.87%)
- S&P 500- 2,052.51 (+1.66%)
- NASDAQ- 4,920.05 (+1.65%)
- Russell 2000- 1,154.52 (+0.84)
- EURO STOXX 50 Price EUR- 3,353.11 (+2.47%)
- FTSE 100 Index- 6,376.28 (+0.44%)
- Deutsche Borse AG German Stock Index DAX- 10,491.97 (+2.48%)
- Nikkei 225- 18,435.87 (-0.64%)
- Hong Kong Hang Seng Index- 22,845.37 (-0.63%)
- Shanghai Shenzhen CSI 300 Index- 3,524.53 (+1.48%)
Stocks in Focus
The stock price of eBay surged almost 14% to $27.58 per share. The company posted financial results that exceeded the expectations of Wall Street analysts. eBay delivered adjusted earnings of $0.43 per share on $2.1 billion in revenue. Analysts expected the company to post earnings of $0.40 per share on $2.09 billion in revenue.
McDonald’s gained more than 8% to $110.86 per share. The company reported earnings of 1.40 per share on $6.62 billion in revenue. Analysts expected McDonald’s to deliver earnings of $1.28 per share on $6.41 billion in revenue.
The shares of Valeant Pharmaceuticals declined further today after BMO Capital Markets analyst Alex Arafaei downgraded his rating to Market Perform. The stock closed $110.21 per share, down 7%. Yesterday, Valeant shares dropped more than 19%.