Photo: Shaun Botterill/Getty Images
Markets advanced as banks rallied after the Moody’s downgrades.But first, the scoreboard:
Dow: 12,653, +77
Nasdaq: 2,892, +33
S&P 500: 1,335, +10
Here’s what you need to know.
- Markets advanced at the open, even as shares in Europe languished. Disappointing German business sentiment and Italian consumer confidence sent overseas markets lower. But the U.S. shrugged that off as financials rallied, led by J.P. Morgan’s two per cent gain. Banks traded higher nearly across the board in the first minutes of trade, following Moody’s downgrades yesterday.
- First Solar was another firm to surge as the opening bell sounded. The company announced it would call back 230 furloughed construction workers to a California site after gaining approval for a large solar farm. Shares shot more than eight per cent higher.
- But not all firms opened higher at 9:30. Ryder Systems, one of the country’s largest transportation and supply chain management firms, cut guidance citing weakness in its commercial fleet business and higher-than-expected health care costs. Ryder said it would earn between $0.90 and $0.95 per share during its second quarter, below earlier estimates for as much as $1.12 per share.
- Headlines crossed the wire shortly after 10:15 a.m. showing French President François Hollande saying the EU could benefit from eurobonds. The comments came as Hollande won backing for growth proposals from leaders of Germany, Italy and Spain in Rome today.
- Meanwhile, Spain saw some relief as borrowing costs subsided after touching euro-area record highs earlier this week. Yields on the 10-year declined 23 basis points to close the day at 6.38 per cent, while the two-year dropped below 4.5 per cent.
- Jeremy Grantham spoke at the Morningstar Investment Conference during the late morning, saying profit margins would fall and a shortage of resources would be “the great paradigm shift.” Grantham also said fund managers were afraid to turn bearish for fear of losing business.
- Oil finished the day higher after a brutal four days. Crude ended up two per cent at $79.72 as a fast-moving weather system headed towards a tropical cyclone upgrade.