January 25, 2018 / 2:59 PM / a month ago

US STOCKS-Wall Street gains on solid earnings, dollar drop

* Caterpillar, Biogen climb after earnings

* Dollar slumps after Draghi comments

* Dow up 0.36 pct, S&P 500 up 0.21 pct, Nasdaq up 0.37 pct (Updates with U.S. market open)

By Chuck Mikolajczak

NEW YORK, Jan 25 (Reuters) - U.S. stocks opened higher on Thursday, buoyed by solid earnings reports and a decline in the dollar after comments from European Central Bank President Mario Draghi.

Biogen Inc gained 1.88 percent after the drugmaker reported fourth-quarter revenue that beat Wall Street estimates on higher sales of its recently launched drug Spinraza.

Caterpillar Inc shares advanced 0.16 percent in after the world’s largest heavy duty equipment maker trounced profit forecasts for a seventh quarter. Buoyant global demand and a recovery in commodities markets drove a 35 percent surge in sales of its construction and mining equipment.

“It’s more of the same, it’s more investor optimism with regard to the economy, with regard to earnings,” said Andre Bakhos, managing director at New Vines Capital LLC in Bernardsville, New Jersey.

“The optimism is there that people don’t want to miss this.”

Robust quarterly earnings reports and economic data have helped propel major Wall Street indexes to a strong start this year, with each on track for a fourth week of gains.

According to Thomson Reuters data through Wednesday morning, earnings growth for the benchmark S&P 500 is expected at 12.4 percent. Of the 88 companies in the index that have posted results, 78.4 percent have topped expectations, while 72 percent had done so on average in the previous four quarters.

The Dow Jones Industrial Average rose 95.65 points, or 0.36 percent, to 26,347.77, the S&P 500 gained 5.93 points, or 0.21 percent, to 2,843.47 and the Nasdaq Composite added 27.60 points, or 0.37 percent, to 7,442.66.

The European Central Bank kept its ultra-easy policy unchanged but weakness in the U.S. dollar accelerated as Draghi warned the surge in the euro was a source of uncertainty and said the bank might have to review strategy if U.S. comments on a weak dollar lead to a change in monetary conditions.

The dollar fell 0.45 percent against a basket of major currencies and held near three-year lows. A weaker dollar tends to benefit large U.S. multinational companies.

The greenback had suffered its biggest daily percentage drop in seven months on Wednesday after U.S. Treasury Secretary Steven Mnuchin said he welcomed a weaker currency.

On Thursday, Mnuchin said a weaker dollar benefited U.S. trade balances in the short term but that he believed in the long-term strength of the currency.

Weekly initial jobless claims rose to 233,000 from a downwardly revised 216,000 in the prior month, but were below the 240,000 forecast, indicating the labor market continues to tighten.

December new home sales data is expected at 10 a.m. ET (1500 GMT).

Ford Motor Co shares slumped 3.18 percent after the automaker posted a lower-than-expected quarterly net profit. The company’s bottom line was hurt by rising commodity costs and unfavorable currency exchange rates, and it expected more pain to come from higher raw material prices in 2018.

After the close of trading on Thursday, results are expected from Intel Corp and Starbucks Corp. (Reporting by Chuck Mikolajczak; Editing by Bernadette Baum and Nick Zieminski)

0 : 0
  • narrow-browser-and-phone
  • medium-browser-and-portrait-tablet
  • landscape-tablet
  • medium-wide-browser
  • wide-browser-and-larger
  • medium-browser-and-landscape-tablet
  • medium-wide-browser-and-larger
  • above-phone
  • portrait-tablet-and-above
  • above-portrait-tablet
  • landscape-tablet-and-above
  • landscape-tablet-and-medium-wide-browser
  • portrait-tablet-and-below
  • landscape-tablet-and-below