NEW YORK ( TheStreet) -- Major U.S. stock markets were gaining Tuesday afternoon as investors bought shares after central banks from Australia to Japan took actions to stimulate their respective economies.
The S&P 500 rose 0.5% to close at 1,625.96. The index has climbed more than 14% this year, eclipsing last year's gains in just five months after last week's upbeat jobs, home price, and consumer confidence reports. The Dow Jones Industrial Average added 0.6% to 15,056.20 while the Nasdaq was tacking on 0.1% to 3,396.63.
"The 'don't fight the Fed' has spread into 'don't fight central banks anywhere'," Brad Sorensen, market strategist at Charles Schwab said in a phone interview. "The market doesn't seem to be too concerned that there's a reason why Australia cut their interest rate ... but the fact that central banks are willing to fight the slowing aggressively is encouraging the market."
On Monday Warren Buffett told CNBC that he prefers equities over bonds right now, warning that investors could risk losing a lot of money in long-term fixed-income vehicles when interest rates start to rise again.EOG Resources (EOG) was the winner on the S&P, surging 8.72% to $137.43 after the energy company on Monday booked a stronger-than-forecast 53% jump in first-quarter profit, as output increased thanks to greater oil and gas production from its wells in the Eagle Ford formation in Texas. First Solar (FSLR) was matching EOG share increases with a slump of 8.2% to $43.20 after posting on Monday first-quarter adjusted earnings of 69 cents a share; analysts were looking for profit of 75 cents. Still, sales rose 52% to $755 million, topping estimates, and the company swung to profit. Fossil (FOSL) was another big advancer, up 8.66% to $107.42 after the fashion accessories maker beat first-quarter earnings at $1.10 a share, versus forecasts for 97 cents a share. The company also exceeded sales forecasts. Baxter International (BAX) was declining 3.74% to $68 after saying that its Gammagard blood treatment was unable to stem physical and mental deterioration during a key study of hundreds of patients with mild to moderate Alzheimer's disease. Asian shares got a boost Tuesday after Australia's central bank slashed its benchmark interest rate by a quarter percentage point to a record low of 2.75%. The Bank of England's Monetary Policy Committee is expected on Thursday to leave its stimulus program on indications that the economy there is improving. The Nikkei 225 in Japan surged by 3.55% after re-opening from a four-day public holiday, giving investors a chance to digest the lower yen and better-than-expected jobs numbers on Friday. Market strategists surveyed by TheStreet generally lean towards further gains in stock markets even as they acknowledge scenarios for a developing bubble. They attribute market gains to the unquenchable thirst for yield and central banks being eager to keep liquidity high as the main reason stocks are poised to keep moving higher. Opinions were mixed on the impact of corporate profits on the market direction. June gold futures were plunging $17.80 to $1,450.20 an ounce. Light sweet crude oil for June delivery was off 44 cents to $95.72 a barrel. Follow @atwtse Written by Andrea Tse in New York >To contact the writer of this article, click here: Andrea Tse.
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