News from the top:
- Vertex share price jump on cystic fibrosis drug trial success
- Oil price rise on stockpile fall
- IBM share price dives on disappointing earnings results
Wall Street swung into bull territory on the strength of second-quarter earnings and an improved economic outlook by investors who were bolstered by more soft data - this time housing starts.
There was a pickup in US homebuilding in June according to data released by the Commerce Department bringing a halt to a three-month slide. Construction of residential housing in June increased 8.3% to an annualised rate of 1.22 million. May figures were also revised upwards from 1.09 million to 1.12 million.
All three indexes closed at record highs. The Dow went up 66 points or 0.3%, the S&P 500 rose 13 points or 0.5% and the Nasdaq strode 40 points or 0.6%. Gains were broad-based with renewable energy (+3.08%), coal (3.05%) and oil equipment and services (2.94%) leading the board.
- Dow 21,640 +0.3%
- S&P 500 2,473 +0.5%
- Nasdaq 6,385 +0.6%
- Russell 2000 1,441 +0.99%
- NYSE Composite 11,941 +0.54%
- Gold 1,240 -0.08%
- Oil WTI $49.62 +1.60%
- 10-Year Treasury Yield 2.27% +0.01
Vertex cystic fibrosis treatment success
Vertex Pharmecuticals thrilled with a +20% jump in share price on the back of positive results from its cystic fibrosis drug treatment. A combined three-drug approach improved lung function for patients by 9.6 percentage points in three trials which beat the around 2.5% average expected by analysts.
Zacks reports that Vertex has developed a medicine that now targets 30,000 out of 75,000 people in the world with the disease.
According to CNBC, JPMorgan analyst, Cory Kasimov, in a research note declared: "The "initial triple combo data does leave us speechless...This series [of updates] is highly impressive across the board."
Oil price rise on stockpile fall
Oil continues to make gains rising to a six-week high up 1.60% to $49 a barrel on Wednesday.
US Energy Information showed oil stockpiles falling by 4.7 million last week. The inventory data was enough for investors to regain confidence that steps taken by Opec to reduce the glut in production is taking effect.
Energy stocks benefitted with companies such as: Murphy Oil climbing +6.73%, Transocean up +6.47% and Newfield Exploration rose 6.45%.
Why is the 'Big Blue's' share price at sea?
IBM's share price stood at close at -4.20% hammered by downbeat revenue results for second quarter. The technology company announced results on Tuesday after the closing bell.
Its lower-than-expected total quarterly revenue fell -4.7% to $19.29 bn analysts expected revenues of $19.46 bn. The decline was attributed to the under-performance of its 'legacy' businesses in hardware and software.
Higher margin businesses in tecnology and cloud computing also generated less revenue falling 5% to $8.4 bn.
IBM beat earnings estimates by analysts of $2.74 per share. However, investors worried that earnings of $2.97 per share were boosted with aid of tax gains - a recurring theme for the company.
Its share price fell -8.76% over three months and -11.12% year to date.