Wall Street closes higher as investors bet on positive earnings season

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Oct 19 (Reuters) – U.S. inventory indexes closed higher on Tuesday with the largest boosts from the know-how and healthcare sectors as investors appeared to bet on strong quarterly experiences even as some apprehensive that it was too early to have fun.

In its fifth straight session of positive aspects, the benchmark S&P 500 index (.SPX) completed simply 0.4% beneath its early September report shut whereas the Dow Jones Industrials common (.DJI) ended the day about 0.5% beneath its report reached in mid-August.

Johnson & Johnson’s (JNJ.N) shares added 2.3% offering an enormous enhance to the S&P 500 after it raised its 2021 adjusted revenue forecast. Insurer Travelers Cos Inc (TRV.N) climbed 1.6% after beating its revenue estimates. learn extra

High-profile know-how and communications corporations had been additionally massive S&P boosts with Apple Inc (AAPL.O), Facebook (FB.O) and Microsoft (MSFT.O) all rising.

But within the second week of earnings with a “very small sample” of releases, Steve Sosnick, chief strategist at Interactive Brokers, apprehensive a few doable pullback.

“We’re seeing volatility measures like the VIX flipping from nervous to complacent in a really short period of time,” mentioned Sosnick. “We may be a bit ahead of ourselves. The mostly likely scenario is that we make one more run at new S&P highs and then we pull back, subject to earnings.”

The CBOE market volatility index (.VIX) fell 0.6 factors after earlier hitting 15.57, its lowest degree since mid-August.

Analysts now anticipate S&P 500 earnings to rise 32.4% from a 12 months earlier, in keeping with Refinitiv information.

“The key for the market to going up from here will not be higher multiples, it will have to be higher earnings. That’s why it’s so important to pay attention to what those profit margins do going forward and what the trajectory of GDP looks like,” mentioned Eric Marshall, portfolio supervisor at Hodges Funds.

“Investors will be paying very close attention to pricing power, how companies are dealing with labor shortages and inflationary cost pressures within their business.”

Traders work on the floor of the New York Stock Exchange (NYSE) in New York City, U.S., October 18, 2021.  REUTERS/Brendan McDermid
Traders work on the ground of the New York Stock Exchange (NYSE) in New York City, U.S., October 18, 2021. REUTERS/Brendan McDermid

The Dow Jones Industrial Average (.DJI) rose 198.7 factors, or 0.56%, to 35,457.31, the S&P 500 (.SPX) gained 33.17 factors, or 0.74%, to 4,519.63 and the Nasdaq Composite (.IXIC) added 107.28 factors, or 0.71%, to fifteen,129.09.

Ten of the eleven main S&P 500 sectors closed higher, with healthcare shares (.SPXHC), up 1.3% after dropping 0.7% in Monday’s session. The subsequent largest gainer was utilities (.SPLRCU), which rose 1.26% after falling nearly 1% Monday.

Netflix Inc (NFLX.O), after closing up 0.2%, added barely to positive aspects after the bell when quarterly outcomes confirmed that world curiosity in Korean thriller “Squid Game” lured extra new prospects than anticipated.

Tesla Inc (TSLA.O), which closed down 0.7%, is because of launch outcomes on Wednesday, with investors expecting indications of its efficiency in China. learn extra

Procter & Gamble Co (PG.N), fell 1% in the course of the session, after it warned that it must elevate costs of some merchandise to counter higher commodity and freight prices.

However, Walmart Inc (WMT.N) shares added 2% after being added to Goldman Sachs “Americas Conviction List.”

Helping the healthcare sector on Tuesday was drugmaker Merck & Co Inc (MRK.N), which rose 3% whereas Pfizer Inc (PFE.N) climbed 1.9% following the discharge of a competitor’s COVID-19 drug examine outcomes.

Its competitor, Atea Pharmaceuticals Inc (AVIR.O), fell 66% after the corporate’s antiviral capsule, being developed with Roche (ROG.S), failed to assist sufferers with gentle and average COVID-19. learn extra

Advancing points outnumbered declining ones on the NYSE by a 1.51-to-1 ratio; on Nasdaq, a 1.69-to-1 ratio favored advancers.

The S&P 500 posted 44 new 52-week highs and 1 new lows; the Nasdaq Composite recorded 72 new highs and 69 new lows.

On U.S. exchanges 9.5 billion shares modified palms in contrast with the ten.29 billion transferring common for the final 20 classes.

Reporting by Shreyashi Sanyal and Devik Jain in Bengaluru; Sinéad Carew in New York, Editing by Saumyadeb Chakrabarty, Shounak Dasgupta and Aurora Ellis

Traders work on the floor of the New York Stock Exchange (NYSE) in New York City, U.S., October 18, 2021.  REUTERS/Brendan McDermid