Wall Street gains on earnings, oil surges
By David Gaffen
NEW YORK (Reuters) - U.S. stocks rallied following several strong earnings reports on Wednesday, while European shares hit a 14-year high after the European Central Bank affirmed its loose policy stance.
Oil rose sharply after U.S. government data showed crude oil inventories rose less than expected last week.
Better-than-expected results from banks JPMorgan Chase and Wells Fargo and earnings from Intel that were broadly in line with expectations boosted Wall Street. First-quarter profits are seen falling 2.6 percent, largely due to weak energy earnings, but the reduced expectations are helping companies clear a lowered bar.
"Management has done a good job guiding market expectations to an appropriate level, and now they're stepping over a lowered bar," said Alan Gayle, senior investment strategist and director of asset allocation at RidgeWorth Investments in Atlanta, Georgia. "Fundamentals in the equity market remain good."
Brent crude oil prices rose 3 percent to $60.20, while U.S. crude futures closed up 5.8 percent at $56.39 a barrel. U.S. crude inventories rose only 1.3 million barrels to 483.69 million, the smallest build since the week ending Jan. 2, according to the Energy Information Administration. [O/R]
Weak data out of China bolstered expectations of additional monetary stimulus that would likely help risk assets such as equities.
The euro bounced around in a volatile session as traders weighed comments from ECB President Mario Draghi after the bank said it expects to continue its asset-purchase program of 60 billion euros a month. The ECB kept interest rates unchanged at record lows. After earlier losses, the euro rebounded, rising to $1.0678 against the dollar, up 0.2 percent.
"Our focus will be on the full implementation of our monetary policy measures," Draghi said. Continued...