US stocks gain for 3rd session, ahead of ECB stimulus
NEW YORK–Wall Street finished higher Wednesday for the third straight session, shrugging off global growth worries in expectation the European Central Bank will announce aggressive stimulus measures Thursday.
Strong earnings by Netflix and UnitedHealth buoyed some of the trade, while IBM shares sank on its poor fourth-quarter report.
The Dow Jones Industrial Average finished up 39.05 points (0.22 percent) at 17,554.28.
The broad-based S&P 500 added 9.57 (0.47 percent) at 2,032.12, while the tech-rich Nasdaq Composite gained 12.58 (0.27 percent) at 4,667.42.
Eyes were on the ECB’s policy meeting Thursday, with multiple inside-source reports all but convincing the markets that it would embark on a quantitative easing program of 50 billion euros ($58 billion) a month for purchases of sovereign bonds, to keep longer-term interest rates low.
“They basically leaked the package for tomorrow, so some of the surprise for tomorrow got in the tape today,” said Mace Blicksilver, director of Marblehead Asset Management.
Blicksilver said earnings surprises like that of Netflix also fueled the buying.
Netflix shares soared 17.3 percent after reporting strong profit gains and that its membership rolls expanded by 4.3 million to 57.4 million in the fourth quarter. The streaming video firm said they expect to top 61 million subscribers by the end of the current quarter.
Leading healthcare group UnitedHealth beat expectations for earnings in its fourth quarter, driving its shares up 3.5 percent.
That offset the impact on the Dow of the 3.1 percent fall in IBM’s shares. The computing giant reported another poor quarter. Revenues in all its markets fell for a total decline year on year of 12 percent to $24.1 billion. Earnings per share were off 3.8 percent to $5.54, still better than what analysts expected.
“We are making significant progress in our transformation, continuing to shift IBM’s business to higher value, and investing and positioning ourselves for the longer term,” said Ginni Rometty, IBM’s chairman, president and chief executive.
Warren Buffett’s huge investment firm Berkshire Hathaway, the largest shareholder in IBM, took collateral damage, falling 1.0 percent.
Microsoft sagged 1.0 percent as it unveiled the upcoming Windows 10 operating system, which aims to harmonize the diverse array of connected gadgets in people’s lives.
Big online services also propelled the indices. Alibaba added 3.35 percent, Amazon 2.8 percent and Google 2.3 percent.
Bond prices fell. The yield on the 10-year US Treasury rose to 1.85 percent from 1.81 percent Tuesday, while the 30-year jumped to 2.44 percent from 2.40 percent. Bond prices and yields move inversely.
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