While you were sleeping: Sentiment lifts Wall St
Oct. 25 (BusinessDesk) - Wall Street gained on optimism about the outlook for corporate earnings, and a fresh wave of merger activity including AT&T’s agreement to buy Time Warner also bolstered sentiment.
In 2.26pm trading in New York, the Dow Jones Industrial Average gained 0.4 percent, while the Nasdaq Composite Index climbed 0.9 percent. In 2.11pm trading, the Standard & Poor’s 500 Index gained 0.4 percent.
“It's been a pretty good quarter for earnings so far and we might finally see the end of earnings recession," Randy Frederick, managing director of trading and derivatives for Charles Schwab in Austin, Texas, told Reuters.
“If you look at the companies that have reported so far, most of them have outperformed the long-term average in profit and revenue,” Frederick noted.
The Dow rose as gains in shares of Microsoft and those of Boeing, recently trading 2 percent and 1.6 percent higher respectively, outweighed slides in shares of Chevron and those of Merck, recently down 1 percent and 0.7 percent respectively.
Shares of AT&T traded 1.8 percent lower after the company said it agreed to Time Warner in a deal worth US$85.4 billion.
Shares of Time Warner last traded 2.5 percent lower at US$87.27, compared with AT&T’s US$107.50 a share’s offer.
Investors “expect bad things to happen in Washington,” Roger Entner, an analyst with Recon Analytics, told Bloomberg. “Investors are sceptical of the deal being consummated.”
Shares of Restaurant Brands International dropped after the owner of Burger King and Tim Hortons posted disappointing quarterly results, underpinning signs of weakness in the fast-food industry.
Burger King’s same-store sales rose 1.7 percent in the quarter, while Tim Hortons’ comparable sales increased 2 percent, the company said in a statement. Both were short of analysts’ expectations and a slowdown from the year-earlier quarter.
Shares of Restaurant Brands International traded 4.2 percent lower as of 1.18pm in New York.
In Europe, the Stoxx 600 Index ended the day at 344.26, a little lower from the previous close. The UK’s FTSE 100 Index fell 0.5 percent. France’s CAC 40 Index gained 0.4 percent, while Germany’s DAX Index rose 0.5 percent.
Syngenta shares slid on concern that China National Chemical Corp’s US$43 billion takeover of the Swiss company risks regulatory delays in the European Union, Bloomberg reported.
ChemChina didn’t submit so-called remedies in the EU’s early-stage review of the deal by the October 21 deadline, leaving the bloc until October 28 to decide whether to approve the deal without any strings attached or open an extended "phase two" probe that could add at least another four months to a decision, according to Bloomberg
Syngenta shares closed 5.8 percent lower in Zurich.