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Overnight Markets: US stocks gain as ECB stimulus boosts optimism

by Himanshu Singh on Jun 06, 2014 at 03:23

Overnight Markets: US stocks gain as ECB stimulus boosts optimism

Wall Street gained to records on Thursday after the European Central Bank stimulus boosted optimism in the global economy before tomorrow’s jobs report.

The Dow Jones industrial average jumped 99 points or 0.59%, to 16,836, the S&P 500 gained 13 points or 0.65%, to 1,940 and the Nasdaq Composite added 45 points or 1.05%, to 4,296.

The ECB cut the deposit rate to -0.10% and unveiled a raft of measures to pump money into the sluggish euro zone economy. It stopped short of full-fledged quantitative easing, but ECB President Mario Draghi said more action would come if necessary.

The day’s gains were also supported after hedge fund manager David Tepper was reported by CNBC as saying the ECB partly "alleviated" his concerns about the market, after having said last month he was worried stock prices were stretched. Investors are now focusing on Friday's US payrolls report for May.

Gains were broad. Industrials advanced 1.1% and financials 0.9%. The day's weakest sector was telecom, considered a defensive group, which rose less than 0.1%. Inc jumped 5.5% after it revived speculation about its next major product on Wednesday, using a mysterious YouTube video and website post to tease a 18 June "launch event" in Seattle to be hosted by CEO Jeff Bezos.

Sprint’s shares fell 4% after it agreed to pay about $40 per share to buy T-Mobile US. T-Mobile US dropped 2.3%.

Rite Aid shares slid 7.4% after it estimated first-quarter profit much below expectations.

Ciena Corp shares jumped 18.4% after the company posted earnings that beat expectations and gave a revenue outlook above forecasts.

In Asia, shares gained on Friday after the ECB announced stimulus measures. The MSCI Asia Pacific Index (MXAP) climbed 0.4% to 144 as of 9:39 a.m. in Hong Kong. Japan’s Topix index gained 0.1%.

New Zealand’s NZX 50 Index added 0.4% and Australia’s S&P/ASX 200 Index rose 0.5%. Hong Kong’s Hang Seng Index advanced 0.3%. Singapore’s Straits Times Index and Taiwan’s Taiex Index both gained 0.4%, while China’s Shanghai Composite Index slipped 0.1%. South Korean markets are closed for a holiday.

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