US stocks log new record highs

US stock market advanced on Wednesday with the S&P 500 and the Dow Jones industrial average closing at fresh record highs as technology stocks rallied after corporate earnings beat lowered expectations. The dollar strengthened slightly: the live dollar index data indicate the ICE US Dollar index, a measure of the dollar’s strength against a basket of six rival currencies, edged 0.08% higher to 97.11. The Dow Jones Industrial Average closed 0.2% higher at 18595.03 with a 5.3% rise in Microsoft shares offsetting 1.3% drop in Disney. The blue chip index posted its seventh consecutive record close in nine straight sessions of gains. The S&P 500 rose 0.4% to 2173.02, the sixth record close in eight sessions.

A 1.4% rise in technology stocks led the gains in broad market index while four out of ten main sectors closed in the red, led by modest losses in consumer staples and utilities. The Nasdaq composite index rose 1.1% to 5089.93, highest close of the year recording 1.7% gain year-to-date.

The yield on the benchmark 10-year Treasury note rose 2.4 basis points to 1.582%. Better than feared earnings reports bolstered investor optimism with higher oil prices and low interest rates supporting risk appetite. So far 14% of companies in the S&P 500 have reported results and 64% of those have beat lowered expectations, while aggregate earnings so far have shown a 4.4% decline year-over-year in the second quarter, the fourth straight quarter of weaker earnings. Today at 14:30 CET Initial Jobless Claims and Continuing Claims will be released in US. At the same time July Philadelphia Fed Manufacturing Index will be published. The tentative outlook is positive. At 16:00 CET June Existing Home Sales will be released. The tentative outlook is negative. Simultaneously June Leading Indicators will be published, the tentative outlook is positive. And at 16:30 CET Natural Gas Storage Change will be released by the Energy Information Agency.

European stock markets rallied on Wednesday with gains in technology stocks offsetting declines in miners. The euro and Pound weakened against the dollar. The Stoxx Europe 600 closed up 1%. Germany’s DAX 30 index closed 1.61% higher at 10142.01 boosted by 6% jump in Volkswagen after it reported higher than expected 7.5 billion euros of earnings for first six months and 5.24% gain in SAP shares, the leading European business software maker. France’s CAC 40 added 1.15% and the UK’s FTSE 100 closed 0.47% higher. Mining stocks fell on weaker than expected corporate reports: BHP Billiton shares slumped 2.3% after the miner said it produced less iron ore than anticipated over the past year, Anglo American shares dropped 4.8%. In economic news German producer prices rose 0.4% month on month in June but fell 2.2% on the year. The UK unemployment rate declined to 4.9% from 5% in the three months to May, the lowest since 2005. Today the European Central Bank policy meeting will take place, the ECB is not expected to announce new stimulus measures. At 13:45 CET the European Central Bank interest rate decision will be announced and at 14:30 CET the ECB press conference will start. Before that at 10:30 CET June Retail Sales will be released in UK. The tentative outlook is positive for Pound.

Asian stocks are advancing to nine-month highs today with Hong Kong’s Hang Seng Index up 0.6%, Shanghai Composite Index gaining 0.2% and Australia’s S&P ASX 200 0.4% higher. Nikkei rose 0.8% today to six week high of 16810.22 helped by weaker yen amid expectations of a 20 trillion yen stimulus measures program which Prime Minister Shinzo Abe instructed his government to prepare last week for cabinet approval on August 2.

Oil futures prices are advancing today after closing higher on Wednesday following the Energy Information Administration report US crude oil inventories fell 2.3 million barrels last week while gasoline stocks rose 911,000 barrels. September Brent crude gained 1.1% to $46.26 a barrel on London’s ICE Futures exchange on Wednesday.

Gold is edging higher from three week low it hit today as investors are waiting for the ECB meeting results. It is up 0.5% at $1318.81 as the US dollar index slipped 0.23% to 96.88.