Quantcast
Strong blue-chip results power Wall St. rally – Metro US

Strong blue-chip results power Wall St. rally

Strong blue-chip results power Wall St. rally
By Medha Singh

By Medha Singh

(Reuters) – The three main Wall Street indexes rose more than 1.5 percent on Tuesday as upbeat earnings from blue-chips such as Johnson & Johnson and Goldman Sachs eased jitters over the impact of rising interest rates and tariffs on corporate profits.

All the 11 major S&P sectors were higher, with nine of them up more than 1 percent. Technology stocks, which led the market selloff last week, and health stocks jumped more than 2 percent.

Insurer UnitedHealth rose 3.8 percent and J&J 2.1 percent after the two Dow components topped estimates for quarterly profit and boosted their earnings forecast for the year.

Morgan Stanley rose 5.4 percent and Goldman Sachs 1.8 percent after they wrapped up earnings from the top six U.S. lenders with better-than-expected quarterly profits.

Walmart gained 1.9 percent after saying it expects U.S. online sales to jump about 40 percent this fiscal year and that profitability in the business was in “good shape”. The stock had fallen earlier after the retailer cut its profit forecast for the year.

Strong earnings reports along with solid data from the Labor Department, which showed U.S. job openings jumped to a record high in August, is helping the sentiment, said Kim Forrest, senior portfolio manager at Fort Pitt Capital Group in Pittsburgh.

The data suggests that companies are seeing demand for their products and services and are hiring people to fulfill them, Forrest added.

Healthy earnings from some of the biggest U.S. companies will help soothe nerves of investors who have been fretting over the impact of tariffs, rising interest rates and wages on corporate profits. Those fears, along with a spike in Treasury yields last week, led to a selloff.

Earnings at S&P 500 companies are expected to have risen 21.8 percent in the third quarter, a slowdown from the past two quarters, according to I/B/E/S data from Refinitiv.

At 12:46 a.m. EDT the Dow Jones Industrial Average was up 402.84 points, or 1.60 percent, at 25,653.39, the S&P 500 was up 43.84 points, or 1.59 percent, at 2,794.63 and the Nasdaq Composite was up 155.21 points, or 2.09 percent, at 7,585.95.

The benchmark 10-year Treasury yield was little changed and well off its high from last week.

“Treading water, if not outright decreasing, is good enough for us right now with respect to interest rates,” said Forrest.

Adobe climbed 8.2 percent, helping ease turbulence in the technology sector, after the software company reaffirmed its current-quarter forecast and provided 2019 targets that allayed concerns over the impact of a recent acquisition.

Netflix rose 1.7 percent ahead of its earnings report, expected after the bell. The video streaming company will be the first to report results among the high-flying FAANG group, the shares of which were at the center of last week’s selloff.

One dampener was W.W. Grainger, which tumbled 13.4 percent after the industrial product distributor posted disappointing quarterly revenue and warned of higher costs from Chinese tariffs.

Advancing issues outnumbered decliners by a 5.13-to-1 ratio on the NYSE and a 3.31-to-1 ratio on the Nasdaq.

The S&P index recorded three new 52-week highs and seven new lows, while the Nasdaq recorded 11 new highs and 55 new lows.

(Reporting by Medha Singh in Bengaluru; Editing by Anil D’Silva)