Wall Street bounced back Tuesday as strong earnings report helped the stock market recover ground lost in last week’s dip.
The three major averages all posted significant gains, CNBC reported.
The Dow Jones Industrial Average — the most-watched of the major averages — rose 547.87 points to 25,798.42. Between Tuesday’s big day and a Friday rally, the Dow has jumped 3 percent from the lows it hit last week.
Wall St. rallies back with earnings boost: U.S. stocks surged on Tuesday after upbeat earnings reports from major companies including UnitedHealth and Goldman Sachs and solid economic data, as equities rebounded from a recent sharp sell-off. pic.twitter.com/jcxUESKxWk
— Abigail P. Cruz (@abigailpollak) October 16, 2018
On Tuesday, the S&P 500 gained 2.1 percent to hit 2,809.92. The Nasdaq Composite went up 2.9 percent to 7,645.49.
Good earnings news came from the financial and health care sectors. Morgan Stanley and Goldman Sachs both reported stronger-than-expected quarters. Johnson & Johnson and UnitedHealth also showed strong results. In all four cases, the strong results led to advances in those stocks.
Kim Forrest, a senior portfolio manager at Fort Pitt Capital, said more strong earnings are expected.
“We were overly worried about the economy at the start of October,” said Forrest, who noted that Tuesday’s release of a new report showing a records number of job openings shows the economy is strong.
“That’s very encouraging,” said Forrest. “That’s the utmost in confidence, when you put up the ‘Help Wanted’ sign. It means your business is demanding growth.”
Scott Wren, senior global equity strategist for the Wells Fargo Investment Institute, said a report showing industrial output rose in September was key, because that report helped allay fears of inflation and an increase in interest rates by the Federal Reserve, PBS reported.
“Anything that helps the market think that the Fed won’t make a mistake is good,” Wren said.
Jim Smigiel, chief investment officer of absolute return strategies at SEI, said the rebound is proof that last week’s market dip was “just normal volatility,” MarketWatch reported.
The market research firm Vistage reported that the growth may not be going away any time soon.
In its report on the September Wall Street Journal/Vistage Small Business CEO Survey, it said that the WSJ/Vistage Small Business CEO Confidence Index was 110.9 in September. That showed an increase from 107.8 in August.
The survey also showed that 76 percent of CEOs expected revenue growth in the next 12 months and that 63 percent expect higher profits.
The survey also reported that 50 percent of the CEOs responding said they would be making capital investment in their business. Of the CEOs responding, 65 percent said they planned to add jobs in the coming year.
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