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%.
Markets closed the day mixed, and well off their lows of the day following a market meltdown earlier in the session. The Nasdaq staged a comeback late in the day, even amid ongoing worries about the Federal Reserve raising interest rates. Doug Flynn, certified financial planner and co-founder of Flynn Zito Capito, joined Cheddar News' Closing Bell to discuss the markets' close and what's driving the major indexes.
Two companies recently announced a new partnership aimed at addressing the growing demand to borrow against crypto - digital assets capital markets firm CrossTower is partnering with commercial bank, BankProv. The companies are launching a crypto lending platform that will allow Bitcoin miners to receive loans to invest in crypto mining equipment. The companies say the program also addresses the difficulty of breaking into crypto mining due to the high cost. CrossTower research analyst Martin Gaspar joins Cheddar News' Closing Bell to discuss.
Next-gen social sports platform Break the Love recently raised $2.5 million in seed funding. Break the Love's platform and iOS app allows users to discover and book group-based tennis activities, to either learn, train, or compete. The new company has already gotten support from a few big names in the world of tennis, including the coach of Naomi Osaka, as well as the United States Tennis Association and the brand Wilson. Break the Love founder and CEO Trisha Goyal joins Cheddar News' Closing Bell to discuss.
The world of NFTs and cannabis are colliding as luxury cannabis company Peakz gears up to launch a digital dispensary in the metaverse. CEO Jessie Grundy and Tiffany McBride, managing director of social equity ventures at The Parent Company, an investor in Peakz, joined Cheddar to break down exactly how a digital dispensary would work. Grundy also talked about offering low-cost NFT courses in an effort to help Oakland, California, residents not miss out on new investing opportunities, and McBride discussed why the tech-forward vision of Grundy was worth investing in for The Parent Company. "He comes with really fresh ideas that he's vetted, that he's experienced in, and I really believe the thinking along Jessie's lines is the future of cannabis," she said. "He's more than just flower and a story. He comes with concepts that are new that are innovative, and that is easy for us to get behind."
Daniel O'Brien, president and global head of enterprise at HTC America, joined Cheddar's "Closing Bell" to discuss new products and services the virtual reality brand showed off at CES 2022, including a wrist tracker — in lieu of controllers — for more accurate interactions connected to its all-in-one headset, the VIVE Focus 3. O'Brien also described a cloud-based, 5G content delivery system. "We partnered up with Lumen Technologies and from six miles away we delivered high bandwidth VR to a headset directly in the Wynn Hotel during CES," he said. "And people were able to walk around in their virtual experience through a wireless signal."
Samsung unveiled a slew of new electronics and upgraded designs at CES 2022. With a heavy focus on gaming and the future of work, the company showed off its all new Odyssey Ark, which boasts a massive 55 in. curved display designed to give users a more immersive and captivating experience. Sang Kim, SVP, Samsung Electronics joined Cheddar's Michelle Castillo to discuss the company's biggest launches as well as major trends to watch in 2022.
Tesla's Austin, Texas-based gigafactory could be days away from opening its doors and beginning production. Dan Ives, managing director of equity research at WedBush Securities, joined Cheddar to talk about his estimate that the EV company will be running its factory within a week and noted that Tesla has been in a good position despite ongoing semiconductor shortages. "They're really almost Teflon-like relative to other automakers," he said, calling its production delays "containable." Amid another shortage — labor —, he said he thinks Tesla positioned itself well for access to talent months ago with expanded hiring amid the move to Texas from California.
The UK's Information Commissioner's office is scrutinizing Facebook's parent company Meta over child safety practices linked to the Oculus headset, according to a report. The agency is looking to question the tech giant about how it's protecting children from harmful experiences in virtual reality.
Hall of Fame quarterback Troy Aikman joined Cheddar's "Between Bells" to talk about his own brand of organic light beer called Eight (his jersey number with the Dallas Cowboys) and explained that he's had an interest in the industry since his days working for a distributor during college. "These brands that are on the market have been there for a long time and [I] felt that it was time for something fresh, something new, and I thought that we could do it in a way that was a better-for-you beer' and that's what we've done," he said. Aikman also provided some insight into the upcoming NFL playoffs and noted that he doesn't see a clear frontrunner for this year's Vince Lombardi trophy.
Disney has secured a patent for a digital world simulator for headset-free augmented reality expected to be accessible in parks by tracking smartphones and projecting personalized 3D displays, an indication that the entertainment giant is gearing up for its entry into the metaverse.
