Optimistic CEOs push stock markets higher
NEW YORK — Solid profits for big companies and optimistic economic news helped nudge the stock market to another record high Thursday.
In European markets, losses turned to gains when the head of the European Central Bank said he was ready to take more steps to revive the region’s struggling economy. The news knocked the euro to a two-year low against the dollar.
Whole Foods Market jumped 12 percent, the biggest gain in the Standard & Poor’s 500 index, after reporting higher quarterly earnings than analysts had expected. Whole Foods climbed $4.33 to end the day at $44.34.
“The news is encouraging today,” said David Joy, chief market strategist at Ameriprise Financial. “It’s especially nice to see the European Central Bank saying the right things.”
The S&P 500 edged up 7.64 points, or 0.4 percent, to close at 2,031.21. That put the benchmark index for most mutual funds up 0.7 percent for the week.
The Dow Jones industrial average rose 69.94 points, or 0.4 percent, to 17,554.47, while the Nasdaq composite gained 17.75 points, also 0.4 percent, to 4,638.47.
Stronger earnings results from Caterpillar, Microsoft and other corporate giants have helped push the market higher over recent weeks. Third-quarter earnings for S&P 500 companies are on track to rise nearly 9 percent, according to S&P Capital IQ. Before results began to roll in, analysts had estimated earnings would increase 6 percent.
“What’s really important about this earnings season is that CEOs are no longer saying, ‘We can survive.’ They’re saying, ‘We’re expanding our business,’ ” said JJ Kinahan, TD Ameritrade’s chief strategist. “There’s a note of optimism we haven’t heard in a long time.”
After the close of regular trading on Wednesday, Tesla Motors posted results that beat Wall Street’s estimates and reported record deliveries of its flagship sedan, the Model S. Tesla’s stock gained $10.25, or 4 percent, to $241.22.
In Europe, Mario Draghi, the head of the European Central Bank, said he would consider more unconventional measures, such as large-scale bond purchases, to pump money into the economy, “if needed.” The ECB has come under increasing pressure to provide more support for Europe’s recovery and prevent prices from falling. Draghi spoke following the ECB’s decision to keep its benchmark interest rate unchanged at 0.05 percent, a record low.
“Draghi has a tendency to cause hysteria in the markets even when he potentially doesn’t mean to,” said Craig Erlam, market analyst at Alpari. “It only takes the slightest suggestion that further easing is likely, or that (bond-buying) is a possibility, and the markets go wild.”
U.S. government bond prices fell, nudging the yield on the 10-year Treasury note up to 2.37 percent.