- Boeing reaches an agreement to sell aircraft to 777 Partners
- Johnson & Johnson and IBM fall for the dollar impact warning
- Halliburton, Hasbro and Truist go up after beating the profits
- Rising indices: Dow 2.43%, S&P 500 2.76%, Nasdaq 3.11%
- The biggest one-day gain for the Nasdaq since June 24th
July 19 (Reuters) – US equities closed strong on Tuesday as more companies joined big banks to report higher-than-expected earnings, giving investors a respite from worries about higher inflation and a tightening of the Fed affecting business results.
The S&P 500 (.SPX) gained 2.8%, the highest close since June 9th. The Nasdaq Composite (.IXIC) rose 3.1%, marking the biggest one-day percentage gain since June 24th.
Shares of Halliburton (HAL.N) rose 2.1% after the oil field service provider recorded a 41% increase in quarterly adjusted profit. read more Toymaker Hasbro Inc (HAS.O) gained 0.7% after reporting quarterly earnings ahead of expectations. Read more
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Truist Financial Corp also exceeded market estimates for quarterly earnings, bringing the bank’s shares up 2.6%.
“Earnings have come in better than lower expectations,” said Paul Kim, CEO of Simplify Asset Management in New York.
“So we’re not seeing the bite of tighter monetary policy and inflation affecting revenue as much as it was feared.”
Shares of Johnson & Johnson lost 1.5%, reversing previous gains. The healthcare giant reported profits and sales that exceeded expectations, but cut its earnings outlook for the year due to the rise in the US currency. Read more
A strong dollar also weighed on the shares of computer hardware and services company IBM Corp. (IBM.N), which on Monday exceeded quarterly revenue expectations, but warned that the impact of the currency on the year could be about $ 3.5 billion.
A Wall Street poster on the New York Stock Exchange in New York City, New York, USA, October 2, 2020. REUTERS / Carlo Allegri
The U.S. dollar marked its third consecutive day of falls, as markets lowered the odds of a total rise in Federal Reserve rates this month.
The inflation spiral initially led markets to raise interest rates by 100 basis points at the next Fed meeting later this month, until some policymakers pointed to a 75 basis point increase. Read more
The Dow Jones Industrial Average (.DJI) rose 754.44 points, or 2.43%, to 31,827.05, the S&P 500 (.SPX) gained 105.84 points, or 2.76%, to to 3,936.69 and the Nasdaq Composite (.53IC) rose 3,531 points. 3.11%, to 11,713.15.
“The macro image hasn’t changed,” Kim said. “We still have some gains in the fall, high inflationary pressures and a hardened Fed. So in the long run, I don’t think that kind of recovery has the capacity to stay.”
In this earnings season, analysts expect the S&P 500 year-on-year aggregate profit to grow 5.8%, below the 6.8% estimate at the beginning of the quarter, according to Refinitiv data.
The stock market volume of the United States was 10.95 billion shares, compared to the average of 11.76 billion in the full session of the last 20 trading days.
Advanced emissions outnumbered those that fell on the NYSE by a ratio of 4.88 to 1 and on the Nasdaq, a ratio of 3.40 to 1 favored the advanced ones.
The S&P 500 recorded a new high of 52 weeks and 30 new lows; the Nasdaq Composite recorded 31 new highs and 56 new lows.
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Report by Echo Wang in New York; Additional report by Shreyashi Sanyal and Aniruddha Ghosh in Bangalore; Editing by Arun Koyyur, Shounak Dasgupta and Deepa Babington
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