Earnings Push Stocks Higher Tuesday 10/26 15:51
Technology and health care companies helped push stocks higher on Wall
Street Tuesday, nudging major indexes to new highs.
(AP) -- Technology and health care companies helped push stocks higher on
Wall Street Tuesday, nudging major indexes to new highs.
The S&P 500 rose 0.2% and notched its second all-time high in two days. The
Dow Jones Industrial Average rose less than 0.1%, good enough for its third
straight record high. The Nasdaq also edged up less than 0.1%.
Trading was choppy and lost some momentum toward the end of the day as
investors continued to review mostly solid company earnings and encouraging
reports on consumer confidence and new U.S. home sales.
Solid earnings reports helped lift several major companies. UPS jumped 6.9%
for the biggest gain in the S&P 500 as higher shipping rates helped the package
delivery service easily beat analyst's third-quarter profit forecasts. Hasbro
rose 3.2% after the maker of Transformers, My Little Pony and other toys
reported solid financial results.
Stocks have been pushing broadly higher as companies turn in much stronger
profit reports for the summer than analysts had expected.
"Right now, valuations are high and the market needs some reassurance from
corporate earnings," said Ernesto Ramos, chief investment officer in the U.S.
for BMO Global Asset Management. "There are still plenty of risks out there,
but the market is focusing on the good things right now."
The S&P 500 rose 8.31 points to 4,574.79. The benchmark index has posted
three weekly gains in a row and leads the other major indexes with a 21.8% gain
this year. The Dow added 15.73 points to 35,756.88, while the Nasdaq inched up
9.01 points to 15,235.71.
Small company stocks fell. The Russell 2000 index lost 16.56 points, or
0.7%, to 2,296.08.
Technology stocks did much of the heavy lifting for the broader market.
Chipmaker Nvidia led the way with a 6.7% gain. Health care stocks and a mix of
companies that rely on consumer spending for goods and services also made solid
gains. UnitedHealth Group rose 1.2% and Amazon.com rose 1.7%.
Only communications and industrial stocks fell. Facebook slid 3.9% after
giving investors a weak sales forecast. The company is also facing scrutiny
over its seemingly lax regulation of harmful and misleading information on its
Bond yields were mixed. The yield on the 10-year Treasury slipped to 1.61%
from 1.63% from late Monday.
Investors received several encouraging economic updates on Tuesday. U.S.
consumer confidence rose in October after three straight declines as the
public's anxiety about the delta variant of the coronavirus appear to have
abated. New home sales jumped 14% in September to the fastest pace in six
months as strong demand helped offset rising prices.
The broader market also welcomed signals that big spending plans in
Washington and potential tax increases for companies will likely be diluted,
Wall Street is still concerned about how much of an impact supply chain
problems will have on a wide range of industries. Many companies have already
warned about higher costs cutting into operations.
Paint maker Sherwin-Williams rose 2% even though its latest results revealed
that higher raw materials costs crimped its finances.
European markets ended higher, while Asian markets closed mixed.
Investors still have a busy week of corporate earnings ahead. Airplane maker
Boeing and beverage company Coca-Cola will report their results on Wednesday.
General Motors and Ford will also release their results on Wednesday. The
reports could help give investors a clearer picture of how the auto industry is
dealing with supply chain problems, including a chip shortage that has been
weighing on auto production.
Apple and Amazon will report on Thursday. The companies, along with
Microsoft and Google, are the four biggest companies on Wall Street by market
value and their stock movements have a huge effect on the S&P 500.