Stocks soar to record high on earnings reports
Solid earnings reports on Thursday drove the stock market to another record high.
Stocks rose from the start of trading after JPMorgan Chase released results that were better than analysts expected. Companies are expected to report earnings dropped again in the April-June period, but a few big ones that have released numbers so far have beaten low expectations, encouraging investors.
The gains were broad, with nine of the 10 industry sectors of the Standard and Poor's 500 index showing gains. Banks rose the most, 0.9%.
Investors pulled money out of conservative assets like gold and Treasury bonds, sending yields on the bonds sharply higher. They also sold stocks of utility companies, considered a haven because of their safe and steady dividends.
The Dow Jones industrial average rose 134.29 points, or 0.7%, to 18,506.41. The S&P 500 gained 11.32 points, or 0.5%, to 2,163.75. The Nasdaq composite increased 28.33 points, or 0.6%, to 5,034.06.
The Dow and S&P 500 remain at record highs, but the Nasdaq is barely positive for the year.
The US gains followed rallies in Germany, France and Japan, with stock indexes in each of those countries rising more than 1%.
British stocks initially rose, then gave up the gains after the Bank of England surprised investors by holding off on cutting interest rates despite the hit to the British economy from last month's vote to leave the European Union. The British pound soared on the news.
US stocks have been on a rocky ride since the start of the year. They fell sharply in January and early February on fears that a slowdown in Chinese economic growth would drag the rest of the world into recession, then rose again, the fell after the shock of Britain's vote.
But a strong US jobs report last Friday, hopes that Japan's ruling party will flood its market with even more money and signs of political stability in Britain as its new prime minister takes over have lifted investor spirits.
Corporate earnings are the biggest driver of stock prices, and they're looking weak overall, notwithstanding Thursday's batch of solid reports. Per share earnings in the S&P 500 are expected to fall 5.5 percent from the year earlier period, the fourth quarter in a row of drops, according to S&P Global Market Intelligence.
Among companies making big moves on Thursday, Japanese messaging app Line surged 27% on its first day of trading, a gain of 8.74 dollars to 41.58 dollars. Line has more users than Facebook or Twitter in Japan.
KFC owner Yum Brands climbed 2.53 dollars, or 3%, to 88.27 dollars after reporting better-than-expected profit late on Wednesday.
JPMorgan Chase rose 96 cents, or 1.5% to 64.12 dollars. In addition to topping profit forecasts, investors were encouraged by strong trading revenue for the quarter. Citigroup and Wells Fargo report results on Friday.
In Europe, Germany's DAX was up 1.4% and the CAC-40 in France rose 1.2%. Britain's FTSE 100 slipped 0.2%.
In Japan, the Nikkei closed nearly 1% higher as the yen weakened against the dollar. Hong Kong's Hang Seng index rose 1.1%.
The British pound rose to 1.3330 dollars from 1.3160 dollars a day earlier. The euro rose to 1.1123 dollars from 1.1114 dollars and the dollar rose to 105.43 yen from 104.33 yen.