BackWall Street rises on earnings boost; Big Tech bounces back
Quarterly reports from UnitedHealth Group Inc and Procter & Gamble Co supported sentiment in early trading, while Bank of America Corp and Morgan Stanley wrapped up earnings from big lenders on a positive note
PremiumU.S. stock indexes rose on Wednesday after upbeat results from a host of companies partially offset a wobbly start to the fourth-quarter reporting season, while Big Tech stocks also made a comeback after a bruising selloff.
Quarterly reports from UnitedHealth Group Inc and Procter & Gamble Co supported sentiment in early trading, while Bank of America Corp and Morgan Stanley wrapped up earnings from big lenders on a positive note.
"Stocks were getting hit last quarter even though they beat estimates, which tells me that their prices were inflated," said Joe Saluzzi, co-manager of trading at Themis Trading in New Jersey.
"Now that we've seen a bit of a sell off, when a company reports better-than-expected earnings, they should get a price rise as opposed to last quarter."
All of the 11 major S&P 500 sector indexes were higher, with battered technology stocks rising 0.9%.
UnitedHealth rose 2.5% after the health insurer beat market estimates for quarterly profit on strong demand in its health insurance business.
Procter & Gamble gained 3.8% as it raised its annual sales forecast, benefiting from resurgent demand for cleaning products due to a spike in COVID-19 infections.
Bank of America added 2.5% on reporting a jump in fourth-quarter profit, while Morgan Stanley rose 2.7% after posting quarterly earnings above market expectations.
Most other big banks including JPMorgan Chase & Co, Citigroup and Goldman Sachs Group Inc reported disappointing results, knocking down the S&P 500 financial sector and banks subsector from record highs.
Earnings from S&P 500 companies are expected to grow 23.1% year-over-year in the fourth quarter, according to IBES estimates from Refinitiv.
The Nasdaq index came a hair's breadth away from confirming a 10% correction at the close on Tuesday, having lost 9.7% from its Nov. 19 record closing high.
The tech-heavy index also closed below its 200-day moving average, a key technical support level, for the first time in almost two years, as the tech-heavy index has been pressured by a jump in benchmark U.S. Treasury yields.
Megacap growth companies, including Microsoft Corp, Alphabet Inc, Tesla Inc, Meta Platforms Inc and Netflix Inc, rose up to 2%.
Investors are now waiting for next week's Federal Reserve policy meeting for more cues on the central bank's plan to control inflation. Data last week showed U.S. consumer prices increased strongly in December, adding up to the largest annual rise in inflation in nearly four decades.
At 9:42 a.m. ET, the Dow Jones Industrial Average was up 138.44 points, or 0.39%, at 35,506.91, the S&P 500 was up 27.93 points, or 0.61%, at 4,605.04 and the Nasdaq Composite was up 101.78 points, or 0.70%, at 14,608.68.
Cisco Systems Inc fell 1.6% after Goldman Sachs downgraded the network equipment maker's stock to "neutral" from "buy".
United Airlines fell 0.6% ahead of its fourth-quarter results after markets close.
Advancing issues outnumbered decliners by a 2.39-to-1 ratio on the NYSE and by a 2.04-to-1 ratio on the Nasdaq.
The S&P index recorded four new 52-week highs and two new lows, while the Nasdaq recorded 16 new highs and 140 new lows.
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This story has been published from a wire agency feed without modifications to the text.
