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US stocks surge on earnings, dovish ECB
[NEW YORK] US stocks powered higher on Thursday, lifted by dovish signals from the European Central Bank and strong earnings from McDonald's, Texas Instruments and others.
The Dow Jones Industrial Average jumped 320.55 points (1.87 per cent) to 17,489.16.
The broad-based S&P 500 rose 33.57 (1.66 per cent) to 2,052.51, while the tech-rich Nasdaq Composite Index gained 79.93 (1.65 per cent) at 4,920.05.
The US rally followed big jumps in equity markets in Paris and Frankfurt after ECB chief Mario Draghi hinted at possible additional monetary stimulus in the coming months.
Dow member McDonald's leaped 8.1 per cent after reporting better-than-expected third-quarter earnings following its first gain in US comparable sales in two years.
Other stocks to rally on earnings included eBay (+13.9 per cent) and Texas Instruments (+11.9 per cent).
Analysts pointed to evidence of a rotation away from health care stocks and toward technology.
Technology companies with large gains included Apple (+1.5 per cent), Facebook (+2.6 per cent), Intel (+3.1 per cent) and Microsoft (+1.8 per cent).
Health stocks that moved lower included insurers UnitedHealth Group (-3.6 per cent) and Aetna (4.6 per cent), and hospital company HCA Holdings (-7.2 per cent).
Valeant Pharmaceuticals International slumped 7.4 per cent as it scheduled a conference call for Monday to refute claims by Citron Research suggesting Valeant is the "pharmaceutical Enron" with fraudulent finances.
Another pharma company, AbbVie, dived 10.3 per cent following a warning from the US Food and Drug Administration of serious liver injury risk from its Viekira Pak drug to treat hepatitis C. Gilead Sciences, which offers a competing drug, surged 5.8 per cent.
Dow Chemical jumped 5.1 per cent as it boosted its dividend by 10 per cent and announced a number of reorganisation moves, including the restructuring of Kuwait joint ventures that will result in a gain of US$1.5 billion.
Petroleum pipeline company Kinder Morgan fell 5.3 per cent after the company signaled it may not boost its dividend significantly in 2016 due to the downturn in commodity prices.
Other companies to report earnings included: Caterpillar (+2.9 per cent), Citrix Systems (+12.0 per cent), Dunkin' Brands (-3.6 per cent), 3M (+4.1 per cent), Under Armour (-5.4 per cent), United Continental (+2.8 per cent) and Southwest Airlines (+7.4 per cent).
Bond prices rose. The yield on the 10-year US Treasury dipped to 2.02 per cent from 2.03 per cent Wednesday, while the 30-year fell to 2.86 per cent from 2.87 per cent. Bond prices and yields move inversely.