Earnings boost stocks, euro retreats as ECB meets

Bloomberg

Stocks rose Wednesday on earnings strength, with the S&P 500 Index and Nasdaq Composite Index adding to Tuesday’s record highs. The euro retraced some recent gains as European policy makers gathered in Frankfurt before Thursday’s rate decision. Oil fluctuated.
It was a day of reversing trends in Europe, with the common currency coming off the highest close since August 2015 as investors weighed the European Central Bank’s plans for stimulus measures and the possibility of a change of tone when the decision is announced. The dollar steadied after the implosion of the US health-care reform bill sent it to the lowest since September a day earlier. The Stoxx Europe 600 Index advanced following its largest drop this month. Electrolux AB and ASML Holding NV were among gainers after reporting earnings.
Investors will be closely watching Europe’s central bank — as well as the Bank of Japan — this week for clues on the fate of easy monetary policies that have helped stoke growth and spur equity markets to record highs. Amid mixed economic data, anemic inflation numbers and a US administration struggling to implement its agenda, traders may be forgiven for reassessing hawkish expectations. “President Draghi will certainly have his work cut out in keeping a lid on the euro at this rate,” Michael Hewson, chief market analyst at CMC Markets UK, wrote in a note. A move to the 1.20 level is “a distinct possibility on a break of 1.1620 and last year’s high,” he said. The industry-funded American Petroleum Institute was said to report an increase in US crude stockpiles; official data is Wednesday. The Bank of Japan is forecast to stand pat at its meeting on Thursday.
The S&P 500 Index was up 0.3 percent at 9:39 a.m. in New York, while the Nasdaq Composite increased 0.5 percent. Both indexes hit record highs on Tuesday. The Stoxx Europe 600 climbed 0.6 percent, its biggest gain in a week. The UK’s FTSE 100 Index added 0.5 percent. The MSCI All-Country World Index rose 0.3 percent to 475.87, hitting the highest on record in its ninth straight day of gains. The yield on 10-year Treasuries were flat at 2.26 percent.