MARKET SNAPSHOT: Stocks Rise On ECB Plan To Scale Back Asset Buys, U.S. Budget Blueprint

By Sue Chang, MarketWatch , Ryan Vlastelica Features Dow Jones Newswires

Twitter shares poised for its best daily gain since September 2016

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U.S. stocks rose on Thursday after the European Central Bank announced plans to extend the length of its quantitative-easing measures but reduce its monthly asset purchases. The move had been expected, but it marked a very gradual tapering of crisis-era measures by the central bank.

The House of Representatives passed a budget blueprint (http://www.marketwatch.com/story/house-narrowly-passes-budget-in-critical-step-for-republicans-tax-plan-2017-10-26), paving the way for the Senate to eventually pass a tax-cut package by simple majority. Some analysts view passage of a tax-cut package as critical to extending the stock-market rally, while others contend gains have been driven by largely earnings and global economic growth.

What are stock indexes doing?

The Dow Jones Industrial Average rose 98 points, or 0.4%, to 23,427. The S&P 500 gained 7 points, or 0.3%, to 2,564 while the Nasdaq Composite Index climbed 4 points to 6,568.

Gains in the Nasdaq were limited by heavy weakness in the biotechnology sector (http://www.marketwatch.com/story/biotech-etfs-tumble-with-celgenes-stock-headlining-weakness-2017-10-26), which also weighed on the overall health-care group. The iShares Nasdaq Biotechnology ETF (IBB) tumbled 1.7% while the health-care sector lost 0.7% as the biggest declining industry of the day.

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What's could drive the markets?

The ECB said it would continue the bond-buying program, which had been scheduled to expire in December, through at least the end of September (http://www.marketwatch.com/story/european-central-bank-to-cut-bond-purchases-to-30-billion-euros-a-month-in-january-2017-10-26) of next year. Beginning in January, monthly purchases will be reduced to EUR30 billion ($35.3 billion).

Read:Draghi averts 'taper tantrum'--for now--as ECB takes baby step toward ending QE (http://www.marketwatch.com/story/draghi-averts-taper-tantrumfor-nowas-ecb-begins-slow-walk-to-normalization-2017-10-26)

The ECB, as expected, left interest rates unchanged and reiterated that it anticipated them to remain at present levels for an "extended period" and beyond the eventual end of its asset buying program.

The markets are also closely monitoring whom President Donald Trump will nominate to lead the Federal Reserve when Chairwoman Janet Yellen's term ends in February. Yellen is out of the race for the top spot, according to two reports on Thursday (http://www.marketwatch.com/story/yellen-looks-to-be-out-of-the-race-for-fed-chief-2017-10-26), leaving Fed Gov. Jerome Powell and Stanford University economist John Taylor as front-runners.

See:What investors need to know about Fed candidate John Taylor's famous rule (http://www.marketwatch.com/story/what-investors-need-to-know-about-john-taylor-and-the-fed-candidates-famous-rule-2017-10-17)

Equity investors are also digesting a parade of earnings, a day after the S&P 500 and the Dow posted their biggest drops in more than seven weeks

(http://www.marketwatch.com/story/microsoft-earnings-cloud-may-maintain-600-billion-market-cap-2017-10-25)What are analysts saying?

On the Fed leadership watch, Kevin Giddis, head of fixed income capital markets at Raymond James, said it's likely a three-way race between Jay Powell, John Taylor, and Yellen.

"If it is John Taylor (hawk), look for the 10--year to take out 2.50% without a problem," he said in a note.

Traders are also keeping an eye on the possibility of getting tax cuts by the end of the year which could further push rates higher, according to Giddis.

Strategists are predicting a continued decline in bond prices which will push yields up could shift more funds into the stock market over the long term.

What data and Fed speakers are in focus?

In the latest economic data, weekly jobless claims (http://www.marketwatch.com/story/us-jobless-claims-climb-10000-to-233000-a-week-after-hitting-44-year-low-2017-10-26) rose by 10,000 to 233,000 in the latest week, holding at a historically low level.

A report on pending-home sales (http://www.marketwatch.com/story/pending-home-sales-wobble-to-a-2-12-year-low-2017-10-26) showed a decline to a 2 1/2 year low in September, missing consensus estimates for a rise of 0.4%, as the housing market is buffeted by lean supply and strong demand. Meanwhile, the advanced U.S. trade deficit widened by 1.3% in September.

See:MarketWatch's economic calendar (http://www.marketwatch.com/economy-politics/calendars/economic)

Which stocks are in focus?

Shares of Twitter (TWTR)(TWTR) surged 20%, poised for their best daily performance since September 2016, after the social media group reported narrower losses (http://www.marketwatch.com/story/twitter-soars-pre-market-as-it-adds-users-but-admits-to-overestimating-users-for-years-2017-10-26). But Twitter also admitted to overstating users for years (http://www.marketwatch.com/story/twitter-admits-to-overstating-users-for-years-2017-10-26).

Celgene Corp. (CELG) plummeted 19% after the company reported a third-quarter profit beat and revenue miss and lowered its 2017 profit and revenue outlook (http://www.marketwatch.com/story/celgene-shares-drop-11-on-updated-2017-guidance-2017-10-26). The stock pressured the overall biotech and health-care sectors.

Tenet Healthcare Corp.(THC) shares tanked 8.8% following a Reuters report that the hospital operator has ended its plan to sell itself after its chief executive abruptly left (http://www.marketwatch.com/story/tenet-announces-early-exit-of-ceo-as-it-continues-to-seek-permanent-successor-2017-10-23)ahead of schedule.

Nutrisystem Inc.(NTRI) continued to slide, falling 10%, despite turning in better-than-expected quarterly earnings (http://www.marketwatch.com/story/shares-of-nutrisystem-skid-despite-robust-quarterly-earnings-new-buyback-plan-2017-10-25).

Ford Motor Co.(F) rose 1% after the auto maker beat profit and revenue estimates (http://www.marketwatch.com/story/ford-shares-jump-15-premarket-as-earnings-blow-through-estimates-2017-10-26).

Buffalo Wild Wings Inc.(BWLD) shares soared 20% after a big profit boost (http://www.marketwatch.com/story/buffalo-wild-wings-stock-takes-flight-with-boneless-wings-2017-10-25)due to a switch to boneless wings for one of its signature promotions.

Bristol-Myers Squibb Co.(BMY) shares fell 4.3% after the company missed on profit and revenue (http://www.marketwatch.com/story/bristol-myers-squibb-reports-q3-profit-miss-revenue-beat-updates-2017-consensus-2017-10-26) and changed its 2017 guidance

Shares of Pfizer Inc.(PFE) fell 0.9% after a Reuters report that the drugmaker will begin the auction process for its consumer health care (http://www.marketwatch.com/story/pfizer-sets-date-for-auction-of-consumer-healthcare-unit-reuters-2017-10-26) unit in November.

U.S.-listed shares of Nokia Corp.(NOK) tumbled 19% after the Finnish telecommunications company said its loss widened in the third quarter (http://www.marketwatch.com/story/nokia-loss-wider-than-seen-in-weak-networks-market-2017-10-26).

Shares of 3M Co. (MMM), which jumped after the maker of Post-it Notes reported better-than-expected quarterly results earlier in the week (http://www.marketwatch.com/story/3ms-stock-jumps-after-profit-and-revenue-rise-above-expectations-2017-10-24), were off 1.5%.

U.S.-listed shares of Barclays PLC (http://www.marketwatch.com/story/barclays-profit-rises-no-word-on-dividend-hike-2017-10-26)(BCS) slid 8.6% and those ofDeutsche Bank AG (http://www.marketwatch.com/story/deutsche-bank-profit-more-than-doubles-2017-10-26-2485813)(DBK.XE) fell 1.5% after each bank reported earnings.

After the market closes, focus will turn to technology heavyweights, with Google-parent Alphabet Inc.(GOOGL), Amazon.com Inc.(AMZN) and Microsoft Corp.(MSFT) are slated to report.

Read:Alphabet earnings: Google's mobile transition is a double-edged sword (http://www.marketwatch.com/story/alphabet-earnings-googles-mobile-transition-is-a-double-edged-sword-2017-10-24)

(http://www.marketwatch.com/story/alphabet-earnings-googles-mobile-transition-is-a-double-edged-sword-2017-10-24) (http://www.marketwatch.com/story/alphabet-earnings-googles-mobile-transition-is-a-double-edged-sword-2017-10-24)Also read:Microsoft earnings: Cloud may maintain $600 billion market cap (http://www.marketwatch.com/story/microsoft-earnings-cloud-may-maintain-600-billion-market-cap-2017-10-25)

What are other markets doing?

The euro fell to $1.1682 as that ECB announcement was made (http://www.marketwatch.com/story/euro-higher-against-the-dollar-as-ecb-meeting-looms-2017-10-26), down from $1.1813 late Wednesday in New York. The ICE Dollar Index jumped 0.8%.

Oil prices reversed earlier drop (http://www.marketwatch.com/story/oil-prices-steady-following-pullback-driven-by-inventory-data-2017-10-26) to rise 0.3%, while gold (http://www.marketwatch.com/story/gold-prices-retreat-as-dollar-gains-against-euro-2017-10-26) was off 0.6%.

Stocks in Asia closed mixed, while European stocks held steady at a higher level (http://www.marketwatch.com/story/european-stocks-cling-to-small-gains-as-investors-brace-for-ecb-move-2017-10-26)after the ECB announcement. Gains were led by Spanish stocks which soared almost 2% on reports that Catalan President Carles Puigdemont could call early elections (http://www.marketwatch.com/story/spain-stocks-rally-on-reports-catalan-leader-will-dissolve-parliament-hold-early-elections-2017-10-26) and dissolve parliament. However, later reports indicated that the Catalan leader may not call a snap election.

Read:Why Italy faces worst shock in Europe as ECB prepares to taper bond buys (http://www.marketwatch.com/story/why-italy-faces-worst-shock-in-europe-as-ecb-prepares-to-taper-bond-buys-2017-10-24)

--Sara Sjolin contributed to this report.

(END) Dow Jones Newswires

October 26, 2017 14:03 ET (18:03 GMT)