Shares rally on earnings, data; bond prices slip

Tue Oct 28, 2014 5:05pm EDT
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By Herbert Lash

NEW YORK (Reuters) - Global equity markets rallied and bond prices eased on Tuesday on solid corporate earnings on both sides of the Atlantic and an upbeat U.S. consumer confidence report that more than made up for weak American housing and industrial data.

Outside of equities, market moves were muted on the first day of a two-day Federal Reserve meeting in which the U.S. central bank will likely reinforce its stated willingness to wait a long while before hiking interest rates.

The Fed is also expected to announce on Wednesday the end of its massive bond-buying stimulus, known as quantitative easing.

The dollar index pared losses after the Conference Board reported U.S. consumer confidence was at its highest in seven years in October, reducing worries over disappointing data on domestic home prices and durable goods orders.

MSCI's all-country world index and major U.S. stock indexes surged more than 1 percent on the consumer sentiment report and data showing U.S. corporate earnings are beating expectations at a higher rate than in recent quarters.

With 245 companies in the S&P 500 having reported earnings so far for the third quarter, 73.5 percent have beat analyst expectations, according to Thomson Reuters. Over the past four quarters, 67 percent of companies have beat estimates.

In Europe about a quarter of companies listed on the STOXX Europe 600 .STOXX benchmark have reported results so far, with 66 percent beating profit forecasts, Thomson Reuters data show.

"Corporate earnings continue to surprise and that has been the wind in the sails of this rebound," said King Lip, chief investment officer at Baker Avenue Asset Management in San Francisco.   Continued...

A man walks past the London Stock Exchange in the City of London October 11, 2013.  REUTERS/Stefan Wermuth