Wall Street Rises as Big Tech and Finance Win
- Energy stocks at their highest since January 2020
- Southwest falls on the cancellation of several flights
- Big banks are expected to start reporting results from Wednesday
- Rising indices: Dow 0.49%, S&P 0.42%, Nasdaq 0.49%
October 11 (Reuters) – U.S. stock indices rose on Monday as growth and financials advanced, brushing aside inflation concerns as third quarter earnings reports approach later this week .
Mega-caps Apple Inc (AAPL.O), Tesla Inc (TSLA.O) and Microsoft Corp (MSFT.O) rose 0.6% to 1%, with nine of the top 11 S&P 500 sector indices trading at the rise.
“Investors see the S&P 500 significantly below its all-time high and there is no headline to scare them into buying, so they are buying as they usually do,” said Mike Zigmont, head of research and trading at Harvest Volatility Management in New York.
“Today’s optimism is more of a return to investor habits that were established after the pandemic liquidated.”
The S&P 500 Financial Sector Index (.SPSY) rose 0.7%, while banks (.SPXBK) added 0.6% ahead of JPMorgan Chase & Co (JPM.N) results on Wednesday and Bank of America Corp (BAC.N), Morgan Stanley (MS.N) and Citigroup Inc (CN) Thursday. Goldman Sachs (GS.N) will release its results on Friday.
Analysts expect a 29.6% year-over-year profit increase for S&P 500 companies in the third quarter, according to IBES data from Refinitiv as of Friday, down from the growth of 96.3% in the second quarter. Read more
“At the start of the year, there was a consensus that inflation was going to be transient, it’s harder to keep saying that now, as we are still seeing bottlenecks in the supply chain that are not happening. are not mitigated, ”said Max Gokhman, chief investment officer at AlphaTraI.
“Margins are so stretched now for companies that there is a realistic concern that companies will not be able to exceed their earnings expectations or will have to point down for the next quarter.”
Markets were gloomy earlier in the day after US oil rose nearly 3% to a seven-year high, fueling fears of higher inflation.
Soaring oil prices, however, pushed the S&P 500 (.SPNY) energy sector up 1.2% to its highest level since January 2020, helping the index recoup all of its pandemic losses.
As of 11:56 a.m. ET, the Dow Jones Industrial Average (.DJI) was up 171.61 points, or 0.49%, to 34,917.86, the S&P 500 (.SPX) was up 18.57 points, or 0.42%, to 4,409.91 and the Nasdaq Composite (.IXIC) is up 72.05 points, or 0.49%, to 14,651.59.
The main Wall Street indices ended the previous week higher, with investors still expecting the Federal Reserve to start cutting back on asset purchases later this year.
After last week’s data showed weaker-than-expected job growth in September, the focus would be on inflation and retail sales figures this week, as well as the report from the latest Fed meeting which could confirm that a November cut has been discussed.
Among individual stocks, Southwest Airlines Co (LUV.N) slipped 1.3% on a report that said it canceled at least 30% of its scheduled flights on Sunday. Read more
Rising issues outnumbered declines by a 2.50-to-1 ratio on the NYSE and by a 1.59-to-1 ratio on the Nasdaq.
The S&P Index recorded 40 new 52-week highs and five new lows, while the Nasdaq recorded 76 new highs and 89 new lows.
U.S. bond markets were closed Monday due to a federal holiday.
Reporting by Shreyashi Sanyal and Devik Jain in Bengaluru; Editing by Arun Koyyur and Aditya Soni
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