NEW YORK, April 24 — Wall Street stocks surged to fresh records yesterday following a plethora of mostly good quarterly earnings that reinforced confidence in the economic outlook.
Both the S&P 500 and Nasdaq ended at all-time highs, with the Dow not far behind following the barrage of solid results from major companies across different economic sectors.
The surge came as European bourses notched modest gains in the first day back after the Easter recess, while oil prices continued to push higher after the US announced it would crack down on Iranian exports.
Investors had been cautious heading into first-quarter earnings period, owing to expectations for an overall drop in profits.
But yesterday's slate of stock market winners included defence giant Lockheed Martin, soft drinks company Coca-Cola, toymaker Hasbro and social media company Twitter.
The strong results have lifted expectations that stocks could continue to rise, even after an almost unbroken climb higher so far in 2019.
“We are now seeing more signs of solid economic growth, as well as indications that companies not only are reporting better than expected first-quarter earnings but also are continuing to guide for modest earnings growth throughout 2019,” Kate Warne, an investment strategist at Edward Jones, told AFP.
Yesterday's advance comes ahead of a number of other key earnings reports later this week, including from tech giants Amazon and Facebook, as well as Boeing, which will report results for the first time since a March Ethiopian Airlines crash led to the worldwide grounding of its 737 MAX.
“The blue chip results are nice to see, yet this market is probably waiting on a stronger directional cue from the response to earnings reports from Facebook and Amazon later in the week,” Briefing.com analyst Patrick O'Hare said.
Oil rally continues
Meanwhile, world oil prices struck fresh 2019 highs a day after the White House announced it would end six-month waivers that had exempted numerous countries from US sanctions for buying Iranian oil.
The White House's announcement means that eight countries — China, India, Turkey, Japan, South Korea, Taiwan, Italy and Greece — will face sanctions starting in May if they continue to buy oil from Iran.
“This points to a big drop in the supply side, which boosts the commodity's price,” said Margaret Yang Yan, market analyst at CMC Markets Singapore.
Stephen Innes, head of trading and market strategy at SPI Asset Management, said rising crude prices meant US$80 (RM330) per barrel was now a “possibility.”
“Oil quickly re-priced higher on fears that markets could face an immediate supply crunch, adding more pressure to the already tenuous global supply squeeze,” he added.
Energy and oil-linked shares jumped yesterday, with Tokyo-listed crude developer Inpex rallying 2.8 per cent and oil refiner JXTG up 1.1 per cent.
In London, BP shot up 2.7 per cent and Shell 2.3 per cent. Yesterday's gains by US giants Exxon Mobil and Chevron were modest after they already rallied on Monday. — AFP
