Surprise earnings power Wall Street gains
Stocks notched solid gains on Wall Street Tuesday as investors welcomed surprisingly good quarterly results from some of the nation’s biggest companies.
Strong earnings from UnitedHealth Group, JPMorgan Chase and other companies helped power the market’s broad gains, erasing modest losses from a day earlier.
Investors are looking to the wave of quarterly report cards due out over the next few weeks to give them a clearer picture of what impact the trade war betrade the U.S. and China is having on corporate profits and the broader economy.
The encouraging earnings reports came with a spate of surprisingly good forecasts for the rest of the year, which helped ease concerns about a slowdown due to the costly trade conflict.
“That was what everybody was afraid of,” said JJ Kinahan, chief market strategist for TD Ameritrade. “Instead, we got ‘no, the future looks good.’”
The S&P 500 index climbed 29.53 points, or 1 percent, to 2,995.68. The benchmark index is now 1 percent below its all-time high set in July.
The Dow Jones Industrial Average rose 237.44 points, or 0.9 percent, to 27,024.80. The Nasdaq gained 100.06 points, or 1.2 percent, to 8,148.71. Smallcompany stocks also bounced back after leading the decline a day earlier. The Russell 2000 index picked up 17.87 points, or 1.2 percent, to 1,523.30.
Bond prices fell. The yield on the 10-year Treasury rose to 1.77 percent from 1.75 percent late Friday. Bond markets were closed Monday for Columbus Day.
Technology, health care, fitween nancial and communication services stocks drove much of Tuesday’s broad rally, which gave the market its fourth gain in five days.
Utilities and makers of consumer goods fell as investors regained an appetite for more risk. The sectors are considered safeplay holdings and usually lag the market when investors are more confident.
The latest batch of company earnings reports gave investors a confidence boost that, for the moment, sidelined concerns about whether Washington and Beijing will be able to work out a deal.
On Friday, the U.S. agreed to suspend a planned hike in tariffs on $250 billion of Chinese goods that had been set to kick in Tuesday. Beijing, meanwhile, agreed to buy $40 billion to $50 billion in U.S. farm products.
Benchmark crude oil fell 78 cents to settle at $52.81 a barrel. Brent crude oil, the international standard, dropped 61 cents to close at $58.74 a barrel. Wholesale gasoline was unchanged at $1.61 per gallon. Heating oil declined 1 cent to $1.91 per gallon. Natural gas rose 6 cents to $2.34 per 1,000 cubic feet.