US stocks end higher for second straight day as Goldman, Lockheed results buoy Wall Street | The Financial Express

US stocks end higher for second straight day as Goldman, Lockheed results buoy Wall Street

US stocks closed higher for a second straight day on Tuesday as solid quarterly results from Goldman Sachs and Lockheed Martin lessened worries of a weak earnings season

US stocks end higher for second straight day as Goldman, Lockheed results buoy Wall Street
The S&P 500 posted 3 new 52-week highs and 2 new lows; the Nasdaq Composite recorded 80 new highs and 102 new lows (Pic Reuters)

US stocks closed higher for a second straight day on Tuesday as solid quarterly results from Goldman Sachs and Lockheed Martin lessened worries of a weak earnings season. Goldman Sachs Group Inc gained 2.33% after reporting a smaller-than-expected drop in quarterly profit as a boost in net interest income cushioned the blow from a slowdown in investment banking. The investment bank, which is reorganizing its business into three units, largely closed out earnings from major financial firms on a largely positive note, even though several lenders raised the loan loss provisions in anticipation of troubled times ahead.

Lockheed Martin shot up 8.69% after the weapons maker posted stronger-than-expected quarterly revenue and maintained its 2022 revenue view. The gains helped lift the S&P industrials index as the best performing of the 11 major sectors. “The banks were good… we’ll see if some of the other ones, more of the consumer sensitive ones, can they pass through their cost increases, have they stopped passing them though, but yeah people are hoping for better,” said Joe Saluzzi, co-manager of trading at Themis Trading in Chatham, New Jersey.

“We need to see more of the earnings data, we need to see more of the data that will knock down inflation and then you can maybe get your rally going, until then I think everybody would say treat all rallies as suspect.” Analysts now expect quarterly earnings growth for S&P 500 companies of just 2.8% from a year ago, much lower than an 11.1% increase expected at the start of July, according to Refinitiv data. The Dow Jones Industrial Average rose 337.98 points, or 1.12%, to 30,523.8, the S&P 500 gained 42.03 points, or 1.14%, to 3,719.98 and the Nasdaq Composite added 96.60 points, or 0.9%, to 10,772.40.

Also providing a boost was a 4.31% rise in Salesforce Inc shares after a media report that activist investor Starboard Value LP has picked up stake in the enterprise software firm. Stocks briefly pared gains late in the session after a report that Apple was cutting production of its iPhone 14 Plus just weeks after starting shipments, before shares of the tech giant recovered and ended the session up 0.94%. Signs the U.S. Federal Reserve’s aggressive rate hike path may be starting to crimp the labor market were beginning to appear. Microsoft Corp, was little changed after a report it was laying off under 1,000 employees this week, becoming the latest U.S. technology company to cut jobs or slow hiring amid a global economic slowdown.

The Fed’s path has left many investors worried it could tilt the economy into a recession by making a policy mistake and raising rates too much. Fed officials have largely been in sync in comments about the need for the central bank to tamp down inflation. A report said ratings agency Fitch has slashed U.S. growth forecasts for this year and next and was set to warn that the Fed’s interest rate hikes and inflation will drive the economy into a 1990-style recession. But economic data on Tuesday indicated the manufacturing sector remains on reasonable footing despite the Fed’s efforts, although they appear to be sharply weighing on the housing market.

Netflix lost 1.73% ahead of its earnings report after the market close, with all eyes on the video-streaming company’s subscriber growth, which is seen falling in the third quarter. But its shares surged 14.49% after the closing bell as it reversed subscriber declines. Volume on U.S. exchanges was 11.67 billion shares, compared with the 11.62 billion average for the full session over the last 20 trading days. Advancing issues outnumbered declining ones on the NYSE by a 2.70-to-1 ratio; on Nasdaq, a 1.90-to-1 ratio favored advancers. The S&P 500 posted 3 new 52-week highs and 2 new lows; the Nasdaq Composite recorded 80 new highs and 102 new lows.

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First published on: 19-10-2022 at 08:06 IST