Wall Street rebounds with booming profits

A Wall Street sign outside the New York Stock Exchange in New York, New York, U.S., October 2, 2020. REUTERS/Carlo Allegri

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  • Boeing lifts deal to sell jets to 777 Partners
  • Johnson & Johnson and IBM fall on dollar impact warning
  • Hasbro and Halliburton rise after beating profits
  • Indices up: S&P 2.5%, Dow 500 2.1%, Nasdaq 2.9%

July 19 (Reuters) – Major U.S. stock indexes extended gains on Tuesday as more companies reported better-than-expected earnings, providing respite for investors worried about higher inflation weighing on corporate results .

Toy company Hasbro Inc beat market estimates for its quarterly profit, sending shares of the toymaker up 0.8%. Read more

Halliburton shares rose 1.2% after the oil services provider posted a 41% increase in quarterly adjusted profit. Read more

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“Earnings beat lower expectations,” said Paul Kim, CEO of Simplify Asset Management in New York.

“So we don’t see the bite of monetary policy tightening and inflation affecting earnings as much as we fear.”

Johnson & Johnson shares fell 1.6%, reversing earlier gains. The healthcare giant reported earnings and sales that beat expectations, but cut its profit outlook for the year due to the soaring US currency. Read more

A strong dollar also weighed on shares of computer hardware and services firm IBM Corp, which beat quarterly revenue expectations on Monday but warned that the forex hit for the year could be around 3. $5 billion.

IBM shares fell 6.5%.

The U.S. dollar hovered just above a one-week low on Tuesday, marking its third straight day of declines as markets slashed the odds of a full Federal Reserve rate hike this month.

Soaring inflation initially led markets to price a 100 basis point hike in interest rates at the next Fed meeting later this month, until some policymakers report an increase of 75 basis points. Read more

Boosting major indexes, Apple Inc (AAPL.O) gained 2.5%, recouping nearly all of its declines from the previous session, when a report said the company planned to slow growth in hiring and spending this year. next. Read more

Other high-growth stocks such as Tesla Inc (TSLA.O), Microsoft Corp (MSFT.O), Meta Platforms Inc (META.O) and Amazon.com Inc (AMZN.O) were also trading higher.

In this earnings season, analysts expect overall S&P 500 earnings year-over-year to rise 5.8%, from an estimated 6.8% at the start of the quarter, according to Refinitiv data.

As of 1:56 p.m. ET, the Dow Jones Industrial Average (.DJI) rose 644.72 points, or 2.07%, to 31,717.33, the S&P 500 (.SPX) gained 93.71 points, or 2.45%, to 3,924.56 and the Nasdaq Composite (.IXIC) added 322.62 points, or 2.84%, to 11,682.67.

All of the 11 major S&P 500 sector indices advanced, with at least eight of them adding more than 2% each.

Boeing Co (BA.N) jumped 4.8% on plans by private equity firm 777 Partners to buy up to 66 more Boeing 737 MAX planes. Read more

Shares of Netflix Inc (NFLX.O) rose 4.6% ahead of its results after the market close.

Advancing issues outnumbered declining ones on the NYSE with a 5.43-to-1 ratio while on the Nasdaq, a 3.97-to-1 ratio favored advancers.

The S&P 500 posted a new 52-week high and 30 new lows; the Nasdaq Composite recorded 27 new highs and 39 new lows.

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Reporting by Echo Wang in New York; Additional reporting by Shreyashi Sanyal and Aniruddha Ghosh in Bengaluru; Editing by Arun Koyyur, Shounak Dasgupta and Deepa Babington

Our standards: The Thomson Reuters Trust Principles.

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