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Wall St. gains after ECB stimulus move; banks lead
January 22, 2015 / 12:16 PM / 3 years ago

Wall St. gains after ECB stimulus move; banks lead

Traders work on the floor of the New York Stock Exchange January 21, 2015. REUTERS/Brendan McDermid

NEW YORK (Reuters) - U.S. stocks rose to session highs ahead of the close on Thursday after the European Central Bank announced larger than expected measures to stimulate the region’s sagging economy.

The ECB will buy 60 billion euros worth of assets per month, more than markets had been hoping for, in a program that will last through September 2016.

Shares in Europe .FTEU3 jumped 1.6 percent to close at a seven-year high.

Analysts said that, while traders applauded the ECB’s decision, many questions remain about the strength of euro zone activity.

“Many have said this program is not going to suddenly flip a switch,” said John Canally, investment strategist at LPL Financial in Boston. “It’s a long slog and this is the first step.”

At 3:17 p.m. EST the Dow Jones industrial average .DJI rose 282.53 points, or 1.61 percent, to 17,836.81, the S&P 500 .SPX gained 32.08 points, or 1.58 percent, to 2,064.2 and the Nasdaq Composite .IXIC added 83.84 points, or 1.8 percent, to 4,751.26.

After trading lower in the morning and at midday on an unexpectedly high increase in oil stockpiling, the S&P 500 energy sector .SPNY moved into positive territory by mid-afternoon and was recently up 0.4 percent.

Financial firms led gains on Thursday boosted by the ECB move, as the S&P 500 financials .SPSY ticked up 2.6 percent.

Wells Fargo (WFC.N) and Bank of America (BAC.N) rose 2.9 percent and 4.9 percent, respectively.

Verizon Communications (VZ.N) was the largest points weight on the S&P 500, down 1.2 percent to $47.65 after swinging to a net loss in its latest quarter.

The stock weighed on both the Dow and on telecom stocks .SPLRCL, which were by far the weakest S&P 500 sector of the day, down 0.7 percent.

American Express Co (AXP.N) also weighed on the Dow, falling 2.3 percent to $85.6, a day after it said it would cut more than 4,000 jobs this year as expenses and provisions for bad loans rose.

F5 Networks Inc (FFIV.O) slumped 11.2 percent to $111.90. The network equipment maker’s revenue missed expectations for the first time in eight quarters. It also forecast current-quarter revenue and profit below estimates.

Avon Products shares (AVP.N) jumped as much as 20.1 percent after Dealreporter said the company was in talks with private equity firm TPG Capital about a potential transaction, citing three industry sources. Avon shares were recently up 18 percent at $8.92.

U.S. jobless claims fell from a seven-month high in the latest week, but the decline was less than expected.

Advancing issues outnumbered declining ones on the NYSE by 2,440 to 623, for a 3.92-to-1 ratio; on the Nasdaq, 1,952 issues rose and 780 fell for a 2.50-to-1 ratio favoring advancers.

The S&P 500 was posting 75 new 52-week highs and 5 new lows; the Nasdaq Composite was recording 52 new highs and 66 new lows.

(This story ha sbeen refiled to corrects analyst location in paragraph five to Boston, not New York)

Reporting by Lucas Iberico Lozada

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