WALL Street’s main indexes rose on Wednesday as upbeat quarterly results from companies including Verizon and Coca-Cola reignited optimism about the health of corporate America.
Coca-Cola Co rose 1.9% after boosting its full-year sales forecast, while Verizon Communications Inc added 1.1% after it beat estimates for quarterly results.
“Everybody knows this is going to be the biggest year-over-year growth rate for earnings in the second quarter,” said Tom Martin, senior portfolio manager at GLOBALT Investments.
Wall Street ended sharply higher on Tuesday, rebounding from a multi-day losing streak, as a string of upbeat earnings reports and revived economic optimism fuelled a risk-on rally.
“There-is-no-alternative (TINA) and fear-of-missing-out (FOMO) are driving the market higher. Every time there’s a dip in the market, people think that’s the opportunity to put more money to work,” Martin said.
Ten of the 11 major S&P sectors advanced in early trading, with economically sensitive industrials, materials, financials and energy leading gains.
The rate-sensitive banking sub-index added 1.9%, tracking Treasury yields.
Market participants are also closely watching the second-quarter earnings season to justify sky-high valuations at which the market trades right now.
For the year so far, the benchmark S&P 500 index has gained 15.8% on optimism about a stronger recovery due to vaccinations and favourable monetary policy.
United Airlines rose 4.2% after its revenue quadrupled from a year ago and topped estimates with a strong domestic travel rebound.
Rivals American Airlines and Southwest Airlines added more than 3.5% each ahead of their results on Thursday.
However, a weak subscriber growth projection by Netflix Inc, which benefited from the stay-at-home environment last year, pushed its shares down 3.6%.
At 10:07am ET, the Dow Jones Industrial Average was up 267.57 points, or 0.78%, at 34,779.56, the S&P 500 was up 25.89 points, or 0.60%, at 4,348.95 and the Nasdaq Composite was up 59.54 points, or 0.41%, at 14,558.42.
Chipotle Mexican Grill Inc gained 9.2% as brokerages raised their price targets on the burrito chain’s stock after it beat estimates for earnings and comparable quarterly sales.
Interpublic Group of Companies jumped 13.4% to the top of the S&P 500 index after the advertising firm posted an upbeat second-quarter profit.
Johnson & Johnson edged 0.1% after the drugmaker forecast upbeat 2021 earnings, while Harley-Davidson Inc fell 3.6% even as it reported a better-than-expected quarterly profit.
Advancing issues outnumbered decliners by a 3.88-to-1 ratio on the NYSE and by a 3.20-to-1 ratio on the Nasdaq.
The S&P index recorded 31 new 52-week highs and no new low, while the Nasdaq recorded 31 new highs and 19 new lows. – July 22, 2021