Solid earnings lift mood on Wall Street ahead of Apple, Amazon results


Traders work on the floor of the New York Stock Exchange (NYSE) in New York City, USA on October 27, 2021. REUTERS / Brendan McDermid

  • The US economy grew the slowest in more than a year in the third quarter
  • Caterpillar and Merck rise after higher profits
  • Indices up: Dow 0.47%, S&P 0.60%, Nasdaq 0.71%

Oct. 28 (Reuters) - Wall Street major indexes rose Thursday as bullish quarterly earnings from Caterpillar, Merck and Ford helped investors shake off data showing US economic growth slowed sharply in the third quarter.

Ford Motor Co (FN) rose 11.2% after the automaker beat third-quarter earnings estimates and raised its earnings forecast for the full year. Continue reading

Caterpillar Inc (CAT.N) was up 2.9% after announcing quarterly earnings from high commodity prices, while a quarterly hit and a forecast increase from drug maker Merck & Co Inc (MRK.N) helped its stock rise Won 4.0%. Continue reading

Ten of the top 11 S&P sectors made strides in early trading, with technology (.SPLRCT) and real estate (.SPLRCR) being the top winners.

The Department of Commerce report showed the U.S. economy grew at an annualized rate of 2% over the last quarter as COVID-19 infections flared up, disrupted global supply chains, and exacerbated labor and goods shortages. Continue reading

Labor market conditions in the United States continued to improve, with the number of Americans filing new unemployment benefits falling to a new 19-month low last week.

"The slower growth in the third quarter was the result of a normalization of spending activity and the continuing substantial bottlenecks. For the fourth quarter, a better development is emerging," said Bernd Weidensteiner, Senior Economist at Commerzbank, in a press release.

"(The data) is not going to stop the Fed from deciding to gradually end its bond purchases next week, given the good labor market and rising price risks."

Excellent earnings reports drove the S&P 500 (.SPX) benchmark index and the Dow Jones Industrial Average (.DJI) to record highs this week, while the tech-heavy Nasdaq (.IXIC) is just 0.4% below its all-time high, peaking on Jan. September.

S&P 500 companies' earnings are set to increase 37.6% year over year in the third quarter, up from an expected increase of 29.4% at the start of earnings season, according to data from Refinitiv.

The focus is also on the earnings reports from Apple Inc (AAPL.O) and e-commerce giant Amazon.com (AMZN.O) after the market closed on Thursday, which close a largely optimistic reporting season for mega-cap technology stocks.

Apple shares rose 2.1% to give the S&P 500 and Nasdaq the biggest boost, followed by gains at Tesla Inc (TSLA.O).

At 10:06 a.m. ET, the Dow Jones Industrial Average (.DJI) rose 165.72 points, or 0.47%, to 35,656.41, and the S&P 500 (.SPX) rose 27.49 points, or 0.60% 4,579.17 and the Nasdaq The Composite (.IXIC) rose 108.00 points, or 0.71%, to 15,343.83.

In the run-up to the US Federal Reserve's monetary policy meeting next week, the market's focus has also shifted to pricing the likely reduction in bond purchases this year and the timing of an interest rate hike next year.

Also on the radar, US President Joe Biden will urge Democrats in Congress to support a new $ 1.75 trillion framework for economic and climate spending. Continue reading

EBay Inc (EBAY.O) was down 7.9% after the e-commerce company forecast declining sales for the Christmas quarter. Continue reading

Increasing issues exceeded declining issues by a ratio of 2.26 to 1 on the NYSE and a ratio of 2.40 to 1 on the Nasdaq.

The S&P index made 22 new 52-week highs and two new lows, while the Nasdaq made 54 new highs and 60 new lows.

Reporting by Devik Jain and Shashank Nayar in Bengaluru; Editing by Shounak Dasgupta and Maju Samuel

Our Standards: The Thomson Reuters Trust Principles.


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