Bullish momentum extended into Wednesday as investors rejoiced over encouraging earnings and economic data on the home front. The Nasdaq led the way higher, soaring 1.53% on the day, while the Dow Jones Industrial Average lagged behind, clinching a gain of 0.78%. Investors focused on better-than-expected quarterly results from Goldman Sachs, while Citigroup’s earnings miss received little to no attention on Wall Street. Gold continues to edge higher amidst earnings season euphoria, and futures prices for the precious yellow metal settled near $1,660 an ounce as the trading session drew to a close.
According to data compiled by Bloomberg, roughly half of the companies in the S&P 500 have posted results surpassing analyst expectations so far this earnings season. Euphoria in the financials sector bolstered broad equity indexes higher as investors were pleasantly surprised to see Goldman Sachs beat estimates. The financial behemoth posted impressive results as the firm had taken measures to cut compensation and expand internationally, in an effort to offset the industry-wide slowdown in trading revenues [see Financials Free ETFdb Portfolio]. Investors also welcomed positive news from overseas; Greece’s government is apparently close to negotiating an agreement with private creditors that would help restore stability in the debt burdened nation.
The State Street SPDR Homebuilders ETF (XHB) was one of the best performers, gaining 3.52% on the day, bolstered by goods news from the U.S. housing sector. The National Association of Home Builders housing market index came in at 25, beating estimates of 22, and blowing past the previous month’s reading of 21. Builders confidence rose in every region of the United States, thanks to improving employment and consumer confidence, with the Northeast region leading the way higher.
The Barclays iPath S&P 500 VIX Short-Term Futures ETN (VXX) was one of the worst performers, shedding 3.43% on the day, as bullish momentum permeated virtually every corner of the market [see ETFs To Smooth Volatility]. John Carey, money manager at Pioneer Investments, commented, “People are realizing that Europe is important, but it’s not the whole world. They are looking at the economic numbers in the U.S. and seeing that we’re not going back into a recession. The economy is still growing. We might be all right at the end of the day”.
Disclosure: No positions at time of writing.