Stocks advance on strong earnings and hope of tourism reopening

Economic bounce from loosened coronavirus restrictions helps drive equity values

In the US, the S&P 500 and the Dow indices rose as a largely upbeat earnings season strengthened expectations of sustained profit growth, but the Nasdaq struggled. Photograph: Ashley Gilbertson/The New York Times

In the US, the S&P 500 and the Dow indices rose as a largely upbeat earnings season strengthened expectations of sustained profit growth, but the Nasdaq struggled. Photograph: Ashley Gilbertson/The New York Times

 

Stocks ended higher in Europe on Monday after the European Commission outlined plans to relax Covid-19 restrictions on tourism, while strong factory and retail sales data and a robust corporate earnings season added to the optimism.

The euro zone stocks index ended 0.6 per cent higher, while the pan-European Stoxx 600 index also added 0.6 per cent.

Gains in the travel sector were limited due to a holiday in United Kingdom markets, given that British stocks make up the bulk of the sector. The UK holiday also kept trading volumes thin across European markets. Dublin’s stock market was also closed.

Still, bourses in Italy, Germany and Spain marked strong gains after a survey showed euro zone factory activity growth reached a record high last month, while German retail sales posted their biggest year-on-year increase in March since the start of the Covid-19 pandemic.

German health technology company Siemens Healthineers rose 2 per cent after it raised its full-year sales and profit forecast while German airline Lufthansa rose 2.6 per cent following plans to offer flights to more than 100 holiday destination.

In the US, the S&P 500 and the Dow indices rose as a largely upbeat earnings season strengthened expectations of sustained profit growth, while the Nasdaq came under pressure from declines in some high-flying growth stocks.

Economy-sensitive and cyclical S&P 500 sectors such as financials, energy, industrials and materials outperformed the sector’s growth stocks, including technology and communication services, by early afternoon.

The Nasdaq index fell as megacap technology stocks, including amazon.com, Alphabet, Facebook and Microsoft traded lower despite largely upbeat results.

Moderna gained 4.5 per cent after the drug maker said it will supply 34 million doses of its Covid-19 vaccine this year to the global Covax programme. Estée Lauder slid 7.5 per cent after the cosmetics maker missed analysts’ estimates for third-quarter sales. – Reuters

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