Stock market today: Dow rose amid optimistic earnings


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The profit season is off to a good start.

Angela Weiss / AFP via Getty Images

The stock market rose on Friday as earnings continued to impress and retail sales data beat expectations.

The


Dow Jones Industrial Average

gained 382 points, or 1.1%, a day after the benchmark climbed 534 points. The


S&P 500

and


Nasdaq Composite

gained 0.8% and 0.5%, respectively.

“In accordance with the planned schedule, the actions are increasing thanks to the first positive results”, writes Louis Navellier, founder of Navellier & Associates.

S&P 500 companies have beaten earnings estimates by a decent notch this earnings season. Third-quarter profits were about 14% above expectations on Friday morning. These beats were boosted by impressive bank profits, which benefited from higher bond yields and the release of billions of dollars that were previously set aside to absorb potential loan losses. Bank executives say the US economy is back on its feet and borrowers have improved their credit.

After several quarters in which companies beat earnings forecasts by more than 15%, the market feared analysts were already forecasting strong third-quarter earnings, making it difficult for companies to surprise by a large margin.

The S&P 500 rally has widened. The index’s gain on Thursday was its largest since March 5 and the number of stocks that participated was the highest since June 21, according to Instinet. More than 65% of S&P 500 stocks rose on Friday, according to FactSet.

The majority of S&P 500 companies have yet to report earnings, but supply chain constraints, higher product costs and rising wages have likely put pressure on sales volumes and margins. beneficiaries. This means that investors should pay particular attention to manufacturers such as


Honeywell

(ticker: HON) and consumer staples like


Procter & Gamble

(PG) for information on these pressures when they report next week.

Meanwhile, September’s retail sales rose 0.7% month-over-month, better than expectations of a 0.2% decline. August retail sales were revised up to a gain of 0.9%. The year-over-year increase for September was 14%.

“This illustrates the strength of the American consumer, and we believe robust spending and borrowing will continue,” wrote Chris Zaccarelli, chief investment officer for the Independent Advisor Alliance.

Although the retail sales result showed strong aggregate consumer demand, it implied that inflation may have eroded some of the demand. Sales volumes accounted for part of the increase in spend, while price increases accounted for the rest,


Citigroup

note economists. The number of automobiles sold increased 6.3% month over month, but overall spending on automobiles rose 0.5% on higher prices.

Abroad, in Tokyo


Nikkei 225

grew by 1.8% and the pan-European market


Stoxx 600

was 0.7% higher.

The price of


Bitcoin

was up 7.6% Friday afternoon, to over $ 61,800. Optimism has grown following a Bloomberg report that the first exchange-traded fund to track regulated Bitcoin futures will soon be approved by the Securities and Exchange Commission, a historic moment for the crypto industry .

Here are six actions in motion on Friday:


Alcoa

The stock (AA) gained 15.2% after the company reported earnings of $ 2.05 per share, beating estimates of $ 1.76 per share, on revenue of 3.11 billion of dollars, higher than expectations of 2.93 billion dollars. The company announced a new $ 500 million share buyback program. JPMorgan analysts also raised their price target to $ 59 from $ 52.


JB Hunt Transport Services

The stock (JBHT) rose 8.7% after the company reported earnings of $ 1.88 per share, beating estimates of $ 1.78 per share, on revenue of 3.14 billion dollars, higher than expectations of 3 billion dollars.


Goldman Sachs Group

The (GS) share gained 3.8% after the investment bank reported earnings of $ 14.93 per share, beating estimates of $ 10.18 per share, on revenue of 13 , $ 6 billion, higher than expectations of $ 11.7 billion.


Virgin Galactic Holdings

(SPCE) fell 16.8% after the company delayed launching its space tourism business until the end of next year.


Moderna

The stock (MRNA) slipped 2.3% even after being overweight neutral at Piper Sandler. The Food and Drug Administration has delayed the decision to approve the company’s Covid-19 vaccine for teens, the Wall Street Journal reported.


Broadcom

(AVGO) stock rose 1.1% after being upgraded to Buy from Neutral at Goldman Sachs.

Write to Jacob Sonenshine at [email protected]

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