While you were sleeping: Earnings lift US stocks

While you were sleeping: Earnings lift US stocks

Oct. 19 (BusinessDesk) - Wall Street climbed as companies including UnitedHealth and Goldman Sachs reported earnings that beat expectations, bolstering confidence about valuations.

In 2.18pm trading in New York, the Dow Jones Industrial Average gained 0.5 percent, while the Nasdaq Composite Index climbed 1.1 percent. In 2.03pm trading, the Standard & Poor’s 500 Index increased 0.8 percent.

“We’ve been selling off for the better part of a week at this point, and earnings have been good enough to get us into this bounce,” Michael Antonelli, an institutional equity sales trader and managing director at Robert W Baird & Co in Milwaukee, told Bloomberg.

The Dow gained, propelled higher by gains in shares of UnitedHealth and those of Goldman Sachs, recently trading 7 percent and 2.3 percent stronger respectively.

UnitedHealth upgraded its outlook for 2016 net earnings.

“Our growth indicators are positive as we conclude 2016, and we expect to be well positioned in 2017 to better serve consumers and deliver more value to the health system overall,” Stephen Hemsley, chief executive officer of UnitedHealth Group, said in a statement.

Shares of Netflix soared, trading 19.6 percent higher as of 2.24pm in New York, after it reported an increase in the number of subscribers that far exceeded analysts’ estimates.

“Netflix showed that the qualitative virtues often cited by bulls—secular growth of internet video, global scale, a commitment to quality content, and singular focus—could drive robust subscriber growth even in the face of well-documented headwinds,” Anthony DiClemente, an analyst at Nomura Securities, wrote in a note to clients Tuesday, Bloomberg reported.

Shares of Domino's Pizza jumped, trading 7.3 percent higher in New York as of 1.35pm, after the world's largest pizza delivery company posted third-quarter earnings that exceeded expectations.

Domestic same store sales grew 13.0 percent during the quarter versus the year-ago period, which represents the 22nd consecutive quarter of positive sales in the US business, the Ann Arbor, Michigan-based company said in a statement.

"Domino's posted the best Q2 domestic same-store sales growth of the 25 largest restaurant chains in the US—and now looks poised to do so again in Q3, likely by a wide margin,” Nomura restaurant analyst Mark Kalinowski said in a client note, according to Reuters.

Bucking the trend were shares of IBM and those of Johnson & Johnson, down 3 percent and 2.6 percent respectively.

IBM’s stock slid after the company reported its 18th consecutive drop in quarterly revenue.

Meanwhile, a Labor Department report showed that the consumer price index rose 0.3 percent in September from the previous month, up from a 0.2 percent increase in the previous month. It underpinned bets that the US Federal Reserve will raise its key interest rate at its December meeting.

"The upward creep of prices weakens any argument against a rate increase in December," Anthony Karydakis, chief economic strategist at Miller Tabak in New York, told Reuters. "The economy is close to full employment and prices are starting to respond to that reality."

In Europe, the Stoxx 600 Index ended the day with a drop of 0.7 percent. The UK’s FTSE 100 Index rose 0.8 percent, Germany’s DAX Index advanced 1.2 percent, while France’s CAC 40 Index climbed 1.3 percent.

(BusinessDesk)

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