US stocks rose on Wednesday amid reports that new stimulus measures would be announced by the European Central Bank at its meeting tomorrow.
Market participants have been looking for aggressive measures from central banks to combat the risk of deflation, which has grown alongside the decline in prices of oil.
Reuters quoted Clem Miller, portfolio manager at Wilmington International Funds as having said, “The timing and duration of bond purchases is just as important as the actual amount, if not more important.”
He added, “There are also a lot of questions about asset distribution, since the market is expecting a lot of government bond purchases, and it would be disappointed if it was more slanted to corporate bonds.”
According to The Wall Street Journal, the Dow Jones Industrial Average climbed 0.3% or 46 points to 17,561 while the S&P 500 gained 0.6% or 13 points to 2,035. The Nasdaq Composite Index added 0.6% or 30 points to 4,684.
The ECB news has helped the stocks to erase early losses that were posted in the wake of the weak earnings from International Business Machines Corp.
Trader at Stifel Nicolaus, Justin Wiggs said there was a significant amount of interest in stocks after the ECB headlines this morning. He said, “We’ve seen a massive reversal today.”
IBM dropped 3.5% to $151.50 after it reported lower-than-expected revenue and gave a 2015 profit that is below the estimates.
UnitedHealth Group Inc. lifted the Dow after rising 2.6% to $108.40 after its Q4 earnings topped estimates.
Netflix Inc rose 17% to $408.77 a day after the streaming and rental video company posted earnings that were above estimates and said that it was growing faster than expected overseas.
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