ASML’s stock climbed 3.1 per cent in Amsterdam. On Wall Street, Broadcom rose 2.7 per cent and Advanced Micro Devices jumped 9.1% and were the two strongest forces lifting the S&P 500.
Several big banks also drove the market higher. Bank of America climbed 4.4 per cent after delivering a profit for the latest quarter that was stronger than analysts expected. CEO Brian Moynihan said every line of the bank’s business reported growth.
Morgan Stanley rose 4.8 per cent after likewise reporting a stronger profit than analysts expected. That followed better-than-expected profit reports from several banks the day before, including JPMorgan Chase and Wells Fargo.
They helped offset a 3.9 per cent drop for PNC Financial. It reported a stronger-than-expected profit for the latest quarter, but it also gave a forecast for upcoming earnings that some analysts said was below expectations.
Abbott Laboratories sank 2.4 per cent after its revenue for the latest quarter finished just shy of analysts’ expectations.
All told, the S&P 500 rose 26.75 points to 6,671.06. The Dow Jones Industrial Average slipped 17.15 to 46,253.31, and the Nasdaq composite climbed 148.38 to 22,670.08.
Companies are under pressure to deliver strong profits after their stock prices broadly surged 35 per cent from a low in April. To justify those gains, which critics say made their stock prices too expensive, companies will need to show they’re making much more in profit and will continue to do so.
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Corporate profit reports are also under more scrutiny than usual as investors hunt for clues about the health of the U.S. economy. That’s because the U.S. government’s latest shutdown is delaying important updates on the economy, such as the report on inflation that was supposed to arrive Wednesday.
The lack of such reports is making the job more difficult for the Federal Reserve, which is trying to figure out whether high inflation or a slowing job market is the bigger problem for the economy.
The Fed cut its main interest rate last month for the first time this year, and officials indicated more may be on the way to give the job market a boost. But too low interest rates can push upward on inflation, which has remained stubbornly stuck above the Fed’s 2 per cent target.
Comments from the Fed’s chair, Jerome Powell, on Tuesday may have hinted more cuts to rates may be on the way.
In the bond market, the yield on the 10-year Treasury held at 4.03 per cent, where it was late Tuesday.
One big winner because of expectations for coming cuts to rates has been gold, and its price rose 0.9 per cent to top $US4,200 ($6,451) per ounce. It’s up nearly 60 per cent for the year so far because of a variety of reasons. Investors are looking to buy something that can offer protection from trade wars, real military wars and the prospect of higher inflation coming because of mountains of debt being amassed by the U.S. and other governments worldwide.
Sharemarkets were mixed in Europe following a stronger finish in Asia. South Korea’s Kospi jumped 2.7 per cent, and France’s CAC 40 rose 2 per cent for two of the world’s bigger moves.
