Wall Street surges in relief rally after French vote result

By Yashaswini Swamynathan

REUTERS - Wall Street surged on Monday, tracking a relief rally that swept through European and Asian stock markets, after Centrist candidate Emmanuel Macron won the first round of the French presidential election.

Polls showed pro-EU Macron is expected to beat right-wing rival Marine Le Pen in a deciding vote on May 7, quelling some fears of a breakup of the Eurozone after Britain's shock exit vote last year.

The election result revived a risk-on sentiment in the market - the major Wall Street indexes notched gains of more than 1 percent, while safe-haven gold and fear gauge VIX tumbled.

 

"Having seen the results of the French election over the weekend, investors are now taking a disaster-avoided view of markets, so all of the risk-off trades are unwinding and risk-on trades put on," said Art Hogan, chief market strategist at Wunderlich Equity Capital Markets in New York.

At 10:54 a.m. ET (1456 GMT), the Dow Jones Industrial Average was up 218.84 points, or 1.07 percent, at 20,766.6 and the S&P 500 was up 24.19 points, or 1.02 percent, at 2,372.88.

The Nasdaq Composite was up 67.11 points, or 1.14 percent, at 5,977.63, easing from an all-time high of 5,983.42.

Ten of the 11 major S&P sectors trading higher, led by financials.

U.S. investors are also gearing up for the busiest earnings week in at least a decade, with over 190 S&P 500 members, including heavyweights Alphabet and Microsoft due to report results.

"Earnings are coming in better than expected and this is for a quarter where estimates were pretty tight. We didn't see much pullback with estimates in the course of the quarter, so expectations were high and we're beating them," Hogan said.

Of the 100 S&P 500 companies that have reported results so far, 77 percent have beaten profit expectations, according to Thomson Reuters I/B/E/S. This has helped lift profit growth estimates to 11 percent from 10 percent forecast at the start of the earnings season.

Hasbro hit a record high after reporting better-than-expected revenue and profit.

Medical device maker C R Bard jumped more than 20 percent to $304.61 after U.S. medical equipment supplier Becton Dickinson said it would buy Bard for $24 billion.

Advancing issues outnumbered decliners on the NYSE by 2,035 to 797. On the Nasdaq, 1,979 issues rose and 719 fell.

The S&P 500 index showed 69 52-week highs and two lows, while the Nasdaq recorded 166 highs and 19 lows.

(Reporting by Yashaswini Swamynathan in Bengaluru; Editing by Saumyadeb Chakrabarty)