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Wall Street advances as earnings season hits the road running

Stock MarketsOct 15, 2019 02:31PM ET
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By Stephen Culp

NEW YORK (Reuters) - Wall Street jumped on Tuesday as third-quarter reporting season kicked into high gear with a spate of upbeat earnings reports that brought buyers back to the equities market.

All three major U.S. stock indexes touched three-week highs, gaining more than 1% in a broad-based rally.

"It's all going to be about earnings for the next couple of weeks and that's a good thing," said Oliver Pursche, chief market strategist at Bruderman Asset Management in New York. "These early beats are a very positive sign."

Even so, Pursche warned that global headwinds persist.

"We're likely to see corporate earnings and monetary policy helping to lift stocks, while geopolitical events will put pressure on stocks," Pursche said. "As such, we'll probably be in this trading range for some time."

On the geopolitical front, investors welcomed news that Britain and the European Union could reach a deal in time for a leaders' summit this week.

Major financial firms JPMorgan Chase & Co (N:JPM), Citigroup Inc (N:C), Goldman Sachs Group Inc (N:GS) and Wells Fargo & Co (N:WFC) all posted results, as did healthcare giants Johnson & Johnson (N:JNJ) and UnitedHealth Group Inc (N:UNH).

Among the big banks, JPMorgan Chase stock hit a record high after it handily beat estimates on bond trading and underwriting strength. Its shares were last up 3.6%.

Citigroup rose 2.0% following its profit beat.

Wells Fargo results were less upbeat, as its profit slid 26% due to sinking mortgage income and legal costs. Goldman Sachs' profit miss was attributed to weak underwriting. Wells Fargo rose 2.8%, while Goldman gained 1.0%.

Prescription drug sales helped drive Johnson & Johnson's upside surprise, while UnitedHealth raised its 2019 guidance on pharmacy benefit growth. Their shares were up 1.9% and 8.2%, respectively.

Analysts currently expect S&P 500 third-quarter earnings to have contracted by 3% from last year, down from the 12.1% growth seen a year ago, according to Refinitiv data.

Of the 34 S&P 500 companies that have reported so far, 88.2% have come in above consensus estimates.

The Dow Jones Industrial Average (DJI) rose 292.98 points, or 1.09%, to 27,080.34, the S&P 500 (SPX) gained 35.49 points, or 1.20%, to 3,001.64 and the Nasdaq Composite (IXIC) added 114.98 points, or 1.43%, to 8,163.63.

Among the 11 major sectors in the S&P 500, eight were in the black, with healthcare (SPXHC), communications services (SPLRCL) and financials (SPSY) enjoying the largest percentage gains.

Blackrock Inc (N:BLK), the world's largest asset manager, beat analyst estimates on strong inflows into its fixed income and cash management business, sending its stock up 2.7%.

In other news, shares of Roku Inc (O:ROKU) surged 10.8% after the announcing Apple Inc's (O:AAPL) TV app was available on its platform and Apple TV+ would be available after it was launched.

Bank of America (N:BAC), expected to post results on Wednesday, rose 2.8% after a Bloomberg report that Warren Buffett' Berkshire Hathaway (NYSE:BRKa) was seeking permission from the Federal Reserve to boost his stake in the bank above 10%.

Advancing issues outnumbered declining ones on the NYSE by a 2.28-to-1 ratio; on Nasdaq, a 2.92-to-1 ratio favored advancers.

The S&P 500 posted 16 new 52-week highs and no new lows; the Nasdaq Composite recorded 36 new highs and 62 new lows.

Wall Street advances as earnings season hits the road running
 

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Guess it
7German7 Oct 15, 2019 5:14PM ET
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its simple if u dont want a crash short to close gaps only that i prefer this week then u can focus on earnings now u go up above a gap and thatq always dangerous
STOCK RESEARCH
STOCK RESEARCH Oct 15, 2019 4:03PM ET
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Christ the same article picture has been used for the past week
Guess it
7German7 Oct 15, 2019 1:45PM ET
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earnings are weak its just low expectations
TA XVCI
TA XVCI Oct 15, 2019 1:45PM ET
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All these hope, when we have pretty bad data showing us how recession might hit us badly.
Guess it
7German7 Oct 15, 2019 1:45PM ET
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its ready to repeat last year q4
eddie glass
eddie glass Oct 15, 2019 12:32PM ET
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Tomorrow: "Wallstreet sees biggest drop of 2019 as trade war fears rise"
eddie glass
eddie glass Oct 15, 2019 11:44AM ET
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Tomorrow: "Wallstreet sees biggest drop of 2019 due to trade war fears"
Peter Dikeakos
Peter Dikeakos Oct 15, 2019 11:15AM ET
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Congress is back for another trillion$ of debt. Taking the country to the cleaners.
Kenny Venezia
Kenny Venezia Oct 15, 2019 11:04AM ET
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I'M rolling on the floor laughing over this BEE-SS
Thabiso Feris
Thabiso Feris Oct 15, 2019 9:18AM ET
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what are expecting in NZD CPI
Ivan Couto Jr
Ivan Couto Jr Oct 15, 2019 9:01AM ET
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Hey, does not matter.....Is there one single good report agains 45 bad ones? Sheer up, meltup, ahead bulls!!!!!
Deepak Mehta
DMEHTA Oct 15, 2019 8:31AM ET
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Really shrinking earnings on strong note total b s news
 
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