Stock indexes set record highs, European shares rise and oil rebounds

NEW YORK – Two major U.S. stock indexes set fresh intraday record highs on Thursday on investors’ rosy outlook for big banks’ second-quarter earnings, while European shares also rose and oil prices rebounded from the previous session’s bruising losses.

Besides banks, cyclical sectors like materials, technology and consumer discretionary, expected to outperform in an environment of economic expansion, also posted strong gains while the only sector to post a loss was defensive utilities.

The benchmark S&P 500 ended at 2,163.75 on Thursday, its fourth straight record closing high after hitting a record intraday peak of 2,168.99.

The Dow Jones Industrial Average gained 134.29 points (0.73 per cent) at 18,506.41, its third straight all-time high. Eastern time. The Standard & Poor’s 500 index gained 14 points, or 0.7 percent, to 2,167. Riskier assets have also lured money amid the growing pool of negative-yielding bonds worldwide.

KFC owner Yum Brands climbed $2.53, or 3 percent, to $88.27 after reporting better-than-expected profit late Wednesday. “If we don’t see better-than-anticipated corporate earnings I think the rally will be shortlived”, Fink, 63, said in an interview today.

Australia’s S&P/ASX 200 Index was little changed and South Korea’s Kospi index fell 0.3 percent. Analysts came into the second-quarter earning season predicting profits will drop by 5.7 percent at S&P 500 companies, which would make it the fifth straight quarterly decline, the longest since 2009. Citigroup and Wells Fargo report on Friday. However, there’s some USA data that could well have a bearing on trade, including weekly jobless claims and producer price figures.

Spot gold prices XAU= were last down 0.81 percent at $1,331.51 an ounce. However, the bank signaled its intention to stimulate the British economy at its next meeting in three weeks when policymakers will be armed with fresh economic forecasts. “The consensus now is no Fed hike and that keeps the dollar from going higher, which in turn helps equities”. Futures on Hong Kong’s Hang Seng Index fell 0.1 percent and contracts on the FTSE China A50 Index lost 0.4 percent. The measure of market turbulence known as the VIX has slipped 50 percent since reaching a four-month high on June 24.

While banks were adding the most to the rally in financials, insurers were also contributing, rising to their highest in five weeks.

Rival carriers United Continental and American Airlines each rose more than 4.0 per cent.

Treasury prices fell as investors weighed a hotter than expected reading of June PPI; the yield on the 10-year note rose 5 bps to 1.53%. CF Industries Holdings Inc. led the group with a 3.5 percent increase. Germany’s Bayer said it raised its all-cash offer to Monsanto shareholders to US$125 a shares, up from its previous offer of US$122 a share, verbally on July 1 and in an updated proposal submitted to Monsanto on July 9.

The benchmark US 10-year note yield rose six basis points, or 0.06 percentage point, to 1.53 percent at 1:47 p.m.in NY, according to Bloomberg Bond Trader data. Delta Air Lines Inc. rose 3.6 percent after reporting quarterly earnings that exceeded analyst estimates.

Thursday’s gains in USA and European shares helped push MSCI’s all-country world equity index to an eight-month high of 412.47. Economists had expected core prices to edge up by 0.2 percent. Qorvo Inc. rose 4.7 percent to a seven-month high, while Skyworks Solutions Inc. and Broadcom Ltd. added more than 2.1 percent to boost semiconductor companies.

Europe’s broad FTSEurofirst 300 index closed 0.86 per cent higher, at 1,337.69.