US: Dow ends 2.4% higher as earnings boost stocks

WALL Street stocks finished a buoyant session solidly higher on Tuesday on hopes of a good earnings season following the upbeat tone of the companies that have reported so far.

The Dow Jones Industrial Average concluded the day at 31,827.05, up 2.4 per cent or more than 750 points.

The broad-based S&P 500 gained 2.8 per cent to 3,936.69, while the tech-rich Nasdaq Composite Index jumped 3.1 per cent to 11,713.15.

“So far we’ve heard good earnings from the banks and the financials,” said Jack Ablin, chief investment officer of Cresset Asset Management. “We have to hear from other sectors before we make a conclusion. But the results we’ve seen so far are impressive.”

US housing data showed a two percent drop in new home construction projects started in June, while some of the large companies reporting results on Tuesday fell after their releases.

But the tone from several of the companies reporting results has been better than feared, with executives describing consumers as still in good shape despite inflation.

Investors have also greeted a pullback in the dollar, as well as an investor survey showing elevated bearishness towards equities following the big retreat in stocks in 2022.

The survey, by Bank of America, revealed exceptionally low stock holdings, which “spurred a contrarian-minded rally effort,” said Briefing.com. “As the market has trended higher, most stocks have gone along for the ride,” Briefing said.

All 11 S&P 500 sectors were in positive territory.

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Among individual companies, Boeing surged 5.7 per cent as it announced a fresh order of up to 66 737 MAX aircraft from investment fund 777 Partners a day after announcing an even bigger order from Delta, also for the MAX.

Halliburton rose 2.5 per cent as it reported a 37 per cent jump in revenues to US$5.1 billion following heavy investment by petroleum producers in the wake of rising commodity prices.

IBM, however, fell 5.3 per cent after the company reported earnings that topped estimates but warned of a heavy drag from the strong dollar on its sales outlook. AFP