Daily Local News (West Chester, PA)
Stocks rally on earnings reports
NEW YORK » U.S. stocks climbed Tuesday after solid earnings reports from several big companies. Stocks had closed at five-month lows the day before, and groups of companies that struggled badly made big gains.
Many of the best-performing stocks Tuesday came from parts of the market that have fared the worst during the market’s plunge this month. Those included smaller and more U.S.focused companies, internet and media companies, basic materials makers and energy companies.
Oreo maker Mondelez and athletic apparel maker Under Armour both jumped following strong third-quarter reports.
Corporate earnings are up about 20 percent this year as the U.S. economy gains strength and corporate taxes come down after last year’s tax cut. Analysts expect company profits to keep growing in 2019, but at a slower pace.
Julian Emanuel, chief equity and derivative strategist for BTIG, said investors are worried about two things that could slow the economy further: the U.S.-China trade dispute, and the Federal Reserve raising interest rates.
“All of this fear about growth is being traded on something we don’t see in the statistics right now,” he said. “You factually don’t have signs of an economic slowdown yet.”
The S&P 500 index jumped 41.38 points, or 1.6 percent, to 2,682.63. On Monday the benchmark index closed at its lowest level since early May following a report that the Trump administration could announce more tariffs on imports from China in December.
The Dow Jones Industrial Average gained 431.72 points, or 1.8 percent, to 24,874.64. The Nasdaq composite advanced 111.36 points, or 1.6 percent, to 7,161.65. The Russell 2000 index of smallercompany stocks rose 29.33 points, or 2 percent, to 1,506.64.
Trading remained uneven: the S&P 500 fell at the start of trading and then turned sharply higher. In the afternoon the index gave up all of its gains and briefly turned lower, but recovered to finish near its highest levels of the day.