The US stocks on Wednesday gained during a volatile session after reports from the European Central Bank (ECB) emerged indicating announcement of new stimulative measures during its meeting on Thursday, though a moderate outlook from IBM narrowed the Dow’s gains.
The market participants have been waiting impatiently for more aggressive policy measures from the central banks in order to check the risk of deflation that has grown due to the declining prices of crude oil.
The Executive Board of the European Central Bank has reportedly proposed a quantitative easing program that would see the central bank buying approximately 50 billion euros or USD 58 billion in bonds per month for a minimum period of one year.
Clem Miller, portfolio manager of Baltimore-based Wilmington International Funds, said, “The timing and duration of bond purchases is just as important as the actual amount, if not more important. 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.”
Wednesday witnessed broad gain as nine of the 10 primary sectors featuring at the S&P 500 were higher on the day. The energy shares emerged as the biggest outperformers of the day, with 1.8 percent surge alongside a three percent gain in the crude oil price.
Despite the rise, crude oil remained at lower levels for the week after a decline of around five percent on Tuesday. Occidental Petroleum on Wednesday increased 1.5 percent to USD 79.20.
At 11:00 am (1600 GMT), the S&P 500 gained 14.63 points, or 0.72 percent, to 2,037.18, the Nasdaq Composite added 34.59 points, or 0.74 percent, to 4,689.43 and the Dow Jones industrial average rose 75.91 points, or 0.43 percent, to 17,591.14.
The Nasdaq Composite recorded 31 new highs and 59 new lows, while the S&P 500 posted 29 new 52-week highs and 9 new lows.
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