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US: Wall St rallies on strong corporate earnings reports

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[NEW YORK] Wall Street rallied broadly on Tuesday, as a slew of better-than-expected quarterly reports, including those from Netflix and UnitedHealth, buoyed investor sentiment.

All of the 11 major S&P 500 sectors were higher, led by an 1.13 per cent rise in the healthcare index.

UnitedHealth rose 6 per cent after the health insurer said it expect the strong growth seen in 2016 to continue into 2017. Other health insurers also gained on the news.

Netflix was the top boost and biggest gainer on the S&P 500, rising 17.5 per cent to US$117.41 after the video streaming website added many more subscribers in the third quarter than expected.

Goldman Sachs rose 2.2 per cent, lifting shares of other banks, after the company's results blew past Wall Street estimates, mirroring results at its Wall Street peers.

Of the 37 S&P 500 companies that have reported results until Monday, 78 per cent have reported earnings that have topped analysts average estimate, according to Thomson Reuters I/B/E/S.

These market-beating reports have led analysts to narrow their estimate for the drop in third-quarter profit at S&P 500 companies to 0.1 per cent from their earlier view of 0.7 per cent.

"The markets are expecting an inflection point as we move from the third to the fourth quarter, and so what they will be parsing in management guidance is for a view that earnings turn positive in the fourth quarter," said David Donabedian, chief investment officer of Atlantic Trust Private Wealth Management.

A report from the Labor Department showed consumer prices rose 0.3 per cent in September, after rising 0.2 per cent the previous month, due to strong gains in gasoline and rents.

At 9:39 am ET the Dow Jones Industrial Average was up 105.09 points, or 0.58 per cent, at 18,191.49.

The S&P 500 was up 14.72 points, or 0.69 per cent, at 2,141.22 and the Nasdaq Composite was up 48.11 points, or 0.93 per cent, at 5,247.93.

Among the laggards was IBM, falling 3.13 per cent after reporting its 18th straight quarter of revenue decline.

Johnson & Johnson was down 0.5 per cent, while Pfizer gained 0.8 per cent on after it announced 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 1.6 per cent on a Barclays upgrade. Yahoo, also due to report in the evening, was up 0.7 per cent.

Advancing issues outnumbered decliners on the NYSE by 2,406 to 310. On the Nasdaq, 1,857 issues rose and 401 fell.

The S&P 500 index showed one new 52-week highs and no new lows, while the Nasdaq recorded 21 new highs and 12 new lows.


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