U.S. stocks staged a dramatic relief rally on Thursday, as investors welcomed stronger than expected corporate earnings ahead of a crucial election in Europe.
The S&P 500 Index rose 0.8% to 2,355.84, reversing a two-day slump that was driven by risk-aversion and plunging energy shares.
Seven of 11 sectors finished in positive territory. Shares of financials companies surged 1.6%. Materials stocks added 1.1% and industrials finished 1.1% higher.
A deluge of upbeat corporate earnings lifted investor sentiment on Thursday and set the stage for another quarter of solid year-over-year gains. Foot Locker (NYSE: FL) and Blackstone Group L.P. (NYSE: BX) were among the top gainers after posting better than expected results.
Earnings season diffused tensions surrounding France’s upcoming election, which many believe is a barometer of anti-EU populism.
French voters head to the polls on April 23 for the first round of presidential elections. The four-way contest is shaping up to be one of France’s most hotly contested elections in recent memory. Pollsters say that, when factoring the margin of error, four candidates have a realistic chance of making the run-off to become president.
A second-round run-off election is scheduled May 7 in the event that no candidate secures a majority on Sunday. The latest polls show independent Emmanuel Macron will defeat populist National Front leader Marine Le Pen in the second round.
The United Kingdom will also be heading for elections this June after Prime Minister Theresa May announced a snap election earlier this week. The prime minister is hoping to secure a larger majority for her Conservatives as they prepare to enter trade negotiations with the European Union (EU). The announcement came less than a month after May formally notified Brussels of her intent to leave the EU.