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US: Wall Street rallies as S&P seen snapping earnings decline
[BENGALURU] Wall Street rallied on Tuesday, following a slew of market-beating results from marquee companies that led to the possibility that Corporate America could snap a four-quarter streak of declining profits.
Of the 52 S&P 500 companies that have reported results to date for the third quarter, 81 per cent have reported earnings that have topped analysts average estimate, according to Thomson Reuters I/B/E/S.
Now analysts estimate earnings at S&P 500 companies rose 0.2 per cent in the quarter, compared with their estimate of a 0.7 per cent drop at the start of the earnings season. Profits at these companies last rose in the second quarter of 2015.
Analysts also expect the latest third quarter will be the first since 2014 in which both earnings and revenue of S&P 500 companies increased.
"We're seeing the delta improve to the upside in this earnings season and that sets the tone for the fourth quarter performance," said Terry Sandven, chief equity strategist at US Bank Wealth Management in Minneapolis.
All of the 11 major S&P 500 sectors were higher, with the spotlight on the healthcare sector that rose 1.14 per cent, its most in about one month.
The biggest boost was from UnitedHealth's 7.1 per cent jump, its biggest in five years, after its upbeat forecast. The stock also boosted the S&P and the Dow.
Netflix was the biggest gainer on the S&P 500, rising nearly 20 per cent after posting much higher-than-expected subscriber growth.
At 12:29pm ET (1629 GMT), the Dow Jones Industrial Average was up 100.44 points, or 0.56 per cent, at 18,186.84.
The S&P 500 was up 17.19 points, or 0.81 per cent, at 2,143.69 and the Nasdaq Composite was up 63.32 points, or 1.22 per cent, at 5,263.14. Both indexes were on track for their best day this month.
Goldman Sachs rose 1.8 per cent after the bank's results blew past Wall Street estimates, mirroring the performance of its Wall Street peers.
Among the laggards was IBM, which fell 3.3 per cent after reporting its 18th straight quarter of revenue decline.
Johnson & Johnson was down 2.5 per cent, while Pfizer gained 1.1 per cent on plans to ship a cheaper biosimilar to Remicade, JNJ's top selling product. The news overshadowed J&J's slight earnings beat.
Intel, scheduled to report after markets close, rose 1.3 per cent on a Barclays upgrade. Yahoo, also due to report in the evening, was up 1.1 per cent.
Advancing issues outnumbered decliners on the NYSE by 2,434 to 485. On the Nasdaq, 1,968 issues rose and 742 fell.
The S&P 500 index showed three new 52-week highs and one new lows, while the Nasdaq recorded 37 new highs and 44 new lows.