Wall Street mints record highs, helped by strong earnings; Fed up next

Wall Street mints record highs, helped by strong earnings; Fed up next

Wall Street’s main indexes rose on Tuesday to record highs as a strong earnings season continued to lift sentiment for equities, while investors were looking ahead to the outcome of a critical Federal Reserve meeting.

The S&P 500 and Nasdaq notched record closing highs for a fourth straight session, while the Industrial Average posted its third straight record close and ended above 36,000 for the first time.

Pfizer shares rose 4.1% after the drugmaker said it expected 2021 sales of the Covid-19 vaccine it developed with German partner BioNTech to reach $36 billion.

Overall, third-quarter earnings have come in better-than-expected for U.S. companies as the economy continues to bounce back from the coronavirus pandemic. With some 320 companies having reported so far, S&P 500 earnings are expected to have climbed 40.2% in the third quarter from a year ago, according to Refinitiv IBES.

“From a fundamental perspective, there is a strong underpinning for the performance of the broad equity market complex,” said Bill Northey, senior investment director at US.

Bank Wealth Management.

“The next several days and weeks will include significant developments on the policy front, and we are watching that very closely because as we transition out of the earnings reporting season many of the macro factors will start to take center stage again.”

The Industrial Average rose 138.79 points, or 0.39%, to 36,052.63, the S&P 500 gained 16.98 points, or 0.37%, to 4,630.65 and the Nasdaq Composite added 53.69 points, or 0.34%, to 15,649.60.

The economically sensitive Transportation Average soared 6.9% to hit an all-time high, lifted by a 108% surge in shares of Avis Budget after the car-rental firm reported earnings.

Nine of 11 S&P 500 sectors ended positive with materials leading the way, up 1.1%. The energy sector fell 1%.

The Fed on Wednesday is expected to approve plans to scale back its $120 billion monthly bond-buying program put in place to help the economy during the pandemic. Investors will also be focused on commentary about interest rates and how sustained the recent surge in inflation is.

“Most times, are happiest when they get predictability, when they get what they expect, and I think the expectation is that they are going to taper,” said Randy Frederick, vice president of trading and derivatives for Charles Schwab in Austin, Texas.

In company news, shares of Under Armour Inc jumped 16.5% after the athletic apparel maker raised its annual forecasts.

Declining issues outnumbered advancing ones on the NYSE by a 1.09-to-1 ratio; on Nasdaq, a 1.02-to-1 ratio favored advancers.

The S&P 500 posted 58 new 52-week highs and four new lows; the Nasdaq Composite recorded 182 new highs and 51 new lows.

About 10.2 billion shares changed hands in U.S. exchanges, compared with the 10.3 billion daily average over the last 20 sessions.

Dear Reader,

Business Standard has always strived hard to provide up-to-date information and commentary on developments that are of interest to you and have wider political and economic implications for the country and the world. Your encouragement and constant feedback on how to improve our offering have only made our resolve and commitment to these ideals stronger. Even during these difficult times arising out of Covid-19, we continue to remain committed to keeping you informed and updated with credible news, authoritative views and incisive commentary on topical issues of relevance.

We, however, have a request.

As we battle the economic impact of the pandemic, we need your support even more, so that we can continue to offer you more quality content. Our subscription model has seen an encouraging response from many of you, who have subscribed to our online content. More subscription to our online content can only help us achieve the goals of offering you even better and more relevant content. We believe in free, fair and credible journalism. Your support through more subscriptions can help us practise the journalism to which we are committed.

Support quality journalism and subscribe to Business Standard.

Digital Editor

Source link