Wall Street Gains In Relief Rally After French Vote Result
U.S. stocks surged on Monday, tracking a relief rally that swept through European and Asian stock markets, after Centrist candidate Emmanuel Macron won the first round of the French presidential election.
Polls showed pro-EU Macron is expected to beat right-wing rival Marine Le Pen in a deciding vote on May 7, allaying some fears of a breakup of the Eurozone after Britain’s shock exit vote last year.
The election result revived a risk-on sentiment in the market – the major Wall Street indexes were on track to post their best one-day advance since March 1, while safe-haven gold and fear gauge VIX .VIX tumbled.
“Having seen the results of the French election over the weekend, investors are now taking a disaster-avoided view of markets, so all of the risk-off trades are unwinding and risk-on trades put on,” said Art Hogan, chief market strategist at Wunderlich Equity Capital Markets in New York.
At 12:35 p.m. ET (1635 GMT), the Dow Jones Industrial Average .DJI was up 212.67 points, or 1.04 percent, at 20,760.43 and the S&P 500 .SPX was up 22.95 points, or 0.98 percent, at 2,371.64.
The Nasdaq Composite .IXIC was up 65.98 points, or 1.12 percent, at 5,976.50, easing from an all-time high of 5,983.42.
Ten of the 11 major S&P sectors were trading higher, led by financials .SPSY.
U.S. investors are also gearing up for the busiest earnings week in at least a decade, with over 190 S&P 500 members, including heavyweights Alphabet (GOOGL.O) and Microsoft (MSFT.O) due to report results.
“Earnings are coming in better than expected and this is for a quarter where estimates were pretty tight. We didn’t see much pullback with estimates in the course of the quarter, so expectations were high and we’re beating them,” Hogan said.
Of the 100 S&P 500 companies that have reported results so far, 77 percent have beaten profit expectations, according to Thomson Reuters I/B/E/S. This has helped lift profit growth estimates to 11 percent from 10 percent forecast at the start of the earnings season.
Hasbro (HAS.O) hit a record high after reporting better-than-expected revenue and profit.
Medical device maker C R Bard (BCR.N) jumped more than 20 percent to $304.61 after U.S. medical equipment supplier Becton Dickinson (BDX.N) said it would buy Bard for $24 billion.
Advancing issues outnumbered decliners on the NYSE by 2,079 to 811. On the Nasdaq, 2,058 issues rose and 746 fell.
The S&P 500 index showed 69 52-week highs and two lows, while the Nasdaq recorded 169 highs and 30 lows.