Stocks Rise as Investors Consider Data, Earnings (Bloomberg)
Stocks rose today, halting two days of losses for the S&P 500, as investors weighed corporate earnings and economic reports for indications that the Federal Reserve may begin to taper its stimulus soon. “For a good part of this year, people have been looking for an acceleration in the economy in the second half,” Jim Welsh, Portfolio Manager at Forward Management LLC in San Francisco, said. “What we’re starting to see is the tug of war between investors acknowledging that P/E ratios have expanded over the last couple years and now in order to see P/E to go even higher, we’re going to need to see more revenue growth.’
Dollar Falls Against Euro and Yen; Euro Rallies (Reuters)
The euro, yen and New Zealand dollar slammed the dollar today as investors found that good news in Europe and New Zealand outweighed any U.S. currency hopes. The euro came out on top, hitting a one-month peak in New York trading after a German Ifo survey showed business morale was slightly better than expected. “Yesterday’s much stronger than expected euro zone PMI data signaled that the bloc’s economy may have bottomed, while overnight, German Ifo business morale also topped market forecasts,” said Omer Esiner, chief market analyst at Commonwealth Foreign Exchange in Washington.
Smaller Companies Bolstering Stock Market Rally, Unemployment Slightly Rises (CNBC)
Smaller companies have sparked the stock market to rally and could ultimately lead to a long-awaited correction, offering a hopeful sign for a pickup in economic growth later this year. Other data today showed that first-time applicants for unemployment benefits slightly rose; however, the underlying trend continued to show job gains. “There is decent momentum suggesting the manufacturing sector continues to hold and contribute to economic growth in the second quarter and the beginning of the third quarter,” said Sam Bullard, senior economist with Wells Fargo Securities in Charlotte, North Carolina.
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