U.S. equity markets stormed back in Wednesday trading, reclaiming much of the ground lost in a massive sell-off sparked by S&P’s negative outlook for the U.S. earlier in the week. All major indexes finished sharply higher, with the S&P 500 gaining 1.4% and the tech-heavy NASDAQ climbing by 2.1%. The NASDAQ should start Thursday trading on a high note, thanks to another strong earnings report from Apple. The tech giant posted profit growth of 95% in its quarterly earnings report after the bell, and shares were up close to 3% in after hours trading. Apple makes up about 20% of the NASDAQ-100 Index, though that weighting is scheduled to be slashed in coming months [see QQQ Preps For Major Shift].
The wave of optimism from investors sent oil prices higher; NYMEX contracts jumped nearly 3% on Wednesday thanks to government data showing a steep decline in inventories and weakness in the U.S. dollar. Gold also continued its meteoric rise, climbing above $1,500/ounce for the first time on Wednesday. The Gold SPDR (GLD) added 0.4% on the day, and is now up close to 6% on the year.
The rally in U.S. markets was dwarfed by even better performances from many international equity markets. One of the biggest ETF winners on the day was the iShares MSCI South Korea Index Fund (EWY), which jumped 3.4%. That rally was attributable partially to a jump in Samsung Electronics, which surged on impressive earnings and guidance for the technology sector. South Korean steelmakers further fueled the rally, with analysts expecting Posco to benefit from a predicted increase in prices in the short-term.
One of the biggest losers on the day from the ETF universe was the PowerShares DB USD Index Bullish (UUP), which tumbled nearly 1%. The greenback’s slide came as the euro climbed to its highest level in nearly 15 months. Other major currencies were also touching high water marks; the Canadian dollar rose to its highest level in more than three years, while the New Zealand dollar hit its highest point in nearly three years high. The Aussie dollar hit a new post-1983 float high. The euro climbed on fading fears about a sovereign debt crisis, thanks primarily to a successful Spanish debt auction. Moreover, strong earnings reports after the bell on Tuesday caused investors to flee safe havens and focus more on interest rate differentials.
Disclosure: No positions at time of writing.