Stock market today: Dow, S&P 500 on the verge of new highs
Wall Street made its best duck impression on Wednesday, with its feet pounding like crazy underwater, though things looked rather calm upstairs.
The third quarter earnings season extended a promising start with help from the healthcare sector. Abbott Laboratories (ABT, + 3.3%) beat revenue and profit expectations for the third quarter and raised its profit forecast for the full year. Insurer Anthem (ANTM, + 7.7%) hit an all-time high after beating estimates and saying COVID-19 is expected to weigh less on its bottom line next year.
Telecom Verizon (VZ, + 2.4%) also stood out with a decent gain after recording a second consecutive quarter of growth in subscribers and higher expectations for the full year.
“This earnings season could be very important for investors as inflation, labor, supply and currency risks set in,” said Lauren Goodwin, economist and portfolio strategist at New York Life Investments. “We expect strong results as earnings reports so far indicate that many large US companies have generated higher profitability despite rising labor costs, thanks to sustained growth in sales.”
But big moves were not exclusive to profit reactions. Pinterest (PINS, + 12.8%) soared following reports that the social media platform is in late-stage talks to be acquired by Pay Pal (PYPL, -4.9%).
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Outside of the equity markets, Bitcoin (+ 3.6% to 66,416.40) broke its previous all-time high of around $ 65,000, boosted by optimism about the launch of the first Bitcoin futures ETF. (Bitcoin trades 24 hours a day; the prices listed here are at 4 p.m. each trading day.)
Despite all of this, the big indices themselves haven’t moved much.
The Dow Jones Industrial Average (+ 0.4% to 35,609) came close to records with its fifth consecutive progression, as did the S&P 500 (+ 0.4% to 4,536), which won in six consecutive sessions. The relative weakness of technology, however, has made Nasdaq Composite five-day winning streak with a marginal drop to 15,121.
âProfits provided the catalyst to kickstart this (recent) recovery,â says Michael Reinking, senior market strategist at the New York Stock Exchange, âin part because the numbers have been positive, but also in helping to hijack the market. beware of the negative macroeconomic headlines that plagued investors from late summer to fall. “
Other stock market news today:
- After the closing bell, You’re here (TSLA) reported earnings of $ 1.86 per share on revenue of $ 13.76 billion, both above Wall Street consensus estimates ($ 1.59 per share and $ 13.63 billion, respectively). The stock edged down after normal business hours after a marginal gain during Wednesday’s regular trading.
- During normal hours, Netflix (NFLX, -2.2%) was the center of attention after the streaming giant posted profits. In the third quarter, NFLX made higher-than-expected profit of $ 3.19 per share on online revenues of $ 7.48 billion. The company also said it added 4.4 million net paying subscribers globally in the three-month period, more than the 3.84 million analysts expected. Oppenheimer analysts maintained their buy rating and raised their price target from $ 130 to $ 750 following the results – with the latter representing an implied rise of about 20% at today’s close at $ 625.14. Massive hyperlocal production operations and the ability to distribute content globally create a wider divide for NFLX, while the company’s pricing power “will be key to sustaining strong revenue growth in the United States and Canada, “they wrote in a note.
- Ford (F) jumped 4.0% after Credit Suisse analyst Dan Levy upgraded auto stock from Neutral to Outperform (the equivalents of Buy and Hold, respectively). âWhen we downgraded Ford early last year, our concern was that Ford was struggling to balance the ‘two clocks’ – short-term performance issues would ultimately limit Ford’s ability to adequately prepare for the long-term transition of the automotive industry, âhe said. said. âYet over the past year and more, we’ve seen a significant turnaround underway at Ford. In addition to ending its “cycle of disappointments over quarterly earnings,” the company has sharply accelerated its switch to electric vehicles (EVs), which Levy says will be “at the heart of improving perception in the long run. term”.
- Small cap Russel 2000 improved 0.6% to 2,289.
- U.S. crude futures contracts jumped 1.2% to $ 83.42 after the Energy Information Administration (EIA) said domestic crude inventories fell unexpectedly last week.
- Gold Futures rose 0.8% to close at $ 1,784.90 an ounce.
- The CBOE Volatility Index (VIX) was down 1.3% to 15.49.
Also pay attention to interest rates
While the Dow Jones and S&P 500 are only a few points off all-time highs, the tech-rich Nasdaq still has about 2% to go after about a month of underperforming its peers in the index.
You can put some of the blame on their sensitivity to interest rates; The 10-year Treasury yield fell from 1.3% at the start of September to 1.6% at the end of September, its highest level since mid-May.
While the Federal Reserve is not expected to get its hands on its benchmark federal funds rate until the end of 2022, longer rates could still keep the pressure on by gradually increasing. Indeed, Kiplinger forecasts a return of 1.8% on the 10-year T-note by early 2022.
But the pain of one stock can often be the gain of another, and so is interest rates, which could continue to stifle the tech sector while supporting other parts of the market.
These 10 stocks, for example, welcome higher rates with open arms as they can often be a direct boost to the bottom line. Most of these choices are in the financial sector, but that’s not the only way to reap the rewards of rising rates. These seven exchange-traded funds (ETFs), for example, give investors access to multiple strategies across multiple asset classes that should benefit if interest rates continue to rise.