Tech, Health Care Lead Stocks Up 10/19 15:53
Health care and technology companies led a broad rally for stocks on Wall
Street Tuesday as investors welcomed another batch of encouraging company
(AP) -- Health care and technology companies led a broad rally for stocks on
Wall Street Tuesday as investors welcomed another batch of encouraging company
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
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 first exchange-traded fund to track Bitcoin futures rose 4.7% in its
market debut Tuesday. Trading was very heavy for the ProShares Bitcoin Strategy
ETF, reflecting the increasing interest in cryptocurrencies.
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%.