Disney quarterly earnings surprise boosts Wall Street

NEW YORK — US stocks climbed on Wednesday on the heels of a surprise quarterly profit from Disney and as investors stayed optimistic that a deal was near for a US coronavirus fiscal aid package.

Walt Disney Co.’s shares jumped 8.80%, to put it among the biggest boosts to the S&P 500 and Dow. The stock notched its biggest daily percentage gain since March 24 as revenue declines for Disney parks and media networks were not as bad as feared.

“That is helping the Dow and that has been a laggard versus the S&P this year, but it is more than that,” said Willie Delwiche, investment strategist at Baird in Milwaukee. “At a time when everyone is talking about how big and how important these megacaps are to the S&P, kind of quietly you are starting to see a little bit of a leadership rotation.”

The Dow Jones Industrial Average rose 373.05 points or 1.39% to 27,201.52; the S&P 500 gained 21.26 points or 0.64% to 3,327.77; and the Nasdaq Composite added 57.23 points or 0.52% to 10,998.40.

Square, Inc. surged 7.10% after the payments processor reported a 64% rise in second-quarter revenue, as consumers increased online buying and used its peerto-peer Cash App platform during the pandemic.

As quarterly results have come in better-than-feared and heavyweight technology and technology-related companies have surged, a heavy dose of fiscal and monetary stimulus have helped fuel a rally in equities to bring the S&P 500 to less than 2% from its closing record on Feb. 19.

With 384 companies in the S&P having reported earnings through Wednesday morning, results are coming in 23.5% above expectations, in aggregate, according to Refinitiv data, the highest on record back to 1994.

Economic data painted a mixed picture, as US services industry activity gained momentum in July, according to an ISM survey, with new orders jumping to a record high. However, hiring declined, supporting views that a recovery in the labor market was faltering.

Earlier, the ADP National Employment Report, which can be an inconsistent precursor to the government payrolls report set for Friday, showed US private employers hired far fewer workers than expected last month.

“We know we had this tremendous rebound off the lows but what we need now is sustained strength,” said Mr. Delwiche.

Friday is being viewed as a deadline by one of the lead negotiators for the White House and some Senate Republicans in talks with congressional Democrats on a fresh round of coronavirus aid, or talks will be scrapped. —