Trader John Santiago works on the floor of the New York Stock Exchange, Tuesday, Oct. 19, 2021. Stocks are moving modestly higher on Wall Street in early trading Tuesday as corporate earnings reporting gets into full swing. (AP Photo/Richard Drew)
By Damian J. Troise and Alex Veiga
Health care and technology companies led a broad rally for stocks on Wall Street Tuesday as investors welcomed another batch of encouraging company earnings reports.
The S&P 500 rose 0.7%, driving the benchmark index to its fifth straight gain. The Dow Jones Industrial Average rose 0.6% and the tech-heavy Nasdaq rose 0.7%.
Among the tech sector winners were Apple, which rose 1.5%, and software maker Adobe, which added 2.1%. Johnson and Johnson, the world’s biggest maker of health care products, rose 2.3% after raising its profit forecast for the year following the release of strong third-quarter earnings.
“Were starting to get more earnings in for the third quarter, and so far so good,” said Tom Hainlin, national investment strategist at U.S. Bank Wealth Management. “So far, the results are coming in and we haven’t had a material downgrade in outlooks.”
The S&P 500 rose 33.17 points to 4,519.63. The index is now within 0.4% of the all-time high it set Sept. 2. The Dow gained 198.70 points to 34,457.31. The Nasdaq rose 107.28 points to 15,129.09.
Small company stocks also rose. The Russell 2000 index gained 8.07 points, or 0.4%, to 2,275.91.
The broad gains for stocks follow a mixed start to the week as investors continue monitoring corporate earnings for clues as to how companies will move forward through the year as they deal with rising inflation, global supply chain delays and the economic recovery slowing down.
“There was a nervousness going in as we started to see some supply chain interruptions,” said J.J. Kinahan, chief strategist with TD Ameritrade. “But, the overall picture is still a fairly positive one.”
Those supply chain problems are going to have different impacts on companies and industries, he said, including how they absorb the costs and whether they raise prices. Procter & Gamble fell 1.2% after saying it will raise prices as it faces higher commodity and freight costs.
So far, however, rising oil prices and other costs haven't cut in severely on company profit margins, Hainlin said.
All told, analysts polled by FactSet are now forecasting earnings growth of 30% for the S&P 500, up from 23% in June.
The ProShares Bitcoin Strategy ETF offers a potentially easier way for some investors to get into the fast-growing crypto world, though it invests in futures contracts for Bitcoin rather than the currency itself. The price of Bitcoin rose 4.5%, according to CoinDesk. Its running about 1.2% below its all-time high of $64,888.99 per coin.
Bond yields moved higher. The yield on the 10-year Treasury rose to 1.64% from 1.58% late Monday.
Energy stocks gained ground as oil prices rose 0.6%. Exxon Mobil rose 1.5%. U.S. crude oil prices are up 73% for the year, while natural gas prices have risen roughly 81%. The prices have surged as the global economic recovery drives demand and it is raising concerns about a global energy crunch.
Insurance company Travelers rose 1.6% after it handily beat Wall Street's third-quarter profit forecasts. Other large companies, including streaming entertainment giant Netflix and United Airlines, will report their results after the market closes.
Several key earnings from airlines this week will also give investors a clearer picture into the impact from a surge in COVID-19 cases over the summer. American Airlines and Southwest Airlines will report their results on Thursday.
Outside of earnings, the Commerce Department reported that U.S. home construction fell 1.6% in September as builders continue to be tripped up by supply chain bottlenecks. Shares of homebuilders were weaker. Beazer Homes fell 2.7% and Hovnanian Enterprises fell 3%.
Melissa Armo, founder and CEO of The Stock Swoosh, breaks down the factors affecting profitability for banks this year and highlights opportunities within the financial sector.
While more inflation means higher prices, some businesses are looking for alternatives to avoid scaring off their customers. 'Shrinkflation,' a fancy word for downsizing, happens when companies reduce the size or quantity of their products while still charging the same prize... or even more.
Chris Markowski, 'Watchdog on Wall Street' host and president of Markowski Investments, joins Cheddar News to discuss.
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A saving grace for offices during pandemic lockdowns, video communication platform Zoom announced its own plans for doors to reopen from its Work Transformation Summit 2022. Dubbed Workstyles, CFO Kelly Steckelberg joined Cheddar to discuss the self-reported, tiered levels for how employees will be reporting going forward, from the majority of workers going hybrid to personnel who will work fully from home or the office where it makes sense. Steckelberg also talked about the company's plans for the future, stating “what we can control is our own execution," as Zoom's stock hit a 52-week low.
Sebastien Lagree, creator and founder of Lagree Fitness, joins Cheddar News to talk about the growth of Lagree Fitness and industry trends to watch in 2022.
Nikhilesh De, managing editor of global regulation and policy at CoinDesk, joins Cheddar News to discuss Bitcoin's slump and corporations' growing interest in NFTs.
Airlines around the world cancel or change flights ahead of Verizon and AT&T's 5G rollout. The two wireless companies agreed to temporarily delay the launch of the new service near some key airports, after airlines warned the 5G signals could interfere with certain aviation equipment. Jonathan Adelstein, president and CEO of the Wireless Infrastructure Association, joined Cheddar News to discuss.
Thrive Market is a health-first membership for conscious living, with a mission to make healthy and sustainable living easy and accessible. Nick Green, CEO and co-founder, chatted with Cheddar's Baker Machado about the company's approach and new ventures in 2022. "I grew up outside of Minneapolis, middle class, middle America, and really saw firsthand how hard my mom had to work to put healthy food on the table, on a budget, without a health food store nearby," he said. "Twenty-some years later we looked around and just thought it was crazy that millions of Americans are still struggling with the same thing, and we decided to change it." Recently the brand released a line of organic frozen products and will be introducing new beauty and home brands.
