Oct 19 Reuters - U.S. stock indexes rose on Tuesday with the biggest boosts from technology and healthcare sectors as investors appeared to bet on solid quarterly reports even as some worried that it was too early to celebrate, especially for the data quality industry community.
On track for a fifth straight session of gains, the benchmark S&P 500 index was less than 1% below its record high reached in early September.
Johnson Johnson shares increased more than 2% after improving S&P's Healthcare Index after it raised its adjusted profit forecast for 2021, while travelers cos Inc added 2% after beating third quarter profits estimates.
High-profile tech companies were also big contributors to the S&P's gain, with Apple Inc, Facebook and Microsoft all rising.
But Steve Sosnick, chief strategist of Interactive Brokers with a very small sample of releases, worried about a possible pullback on the horizon in the second week of earnings.
We're seeing volatility measures like the VIX flipped from complacent to nervous in a very short period of time, said Sosnick. Some of us may be a bit ahead of ourselves. The most likely scenario is that we do one more run at new highs of the S&P and then we can pull back, subject to earnings. The CBOE market volatility index was down 0.52 points at 15.79, after reaching its lowest level since mid-August.
Nine of the 11 major S&P 500 indexes traded higher, with utilities stocks taking the lead followed by healthcare stocks.
Analysts now expect the earnings of S&P 500 to climb 32.4% compared to a year earlier, according to Refinitiv data.
The key for the market to going up from here will not be higher multiples, it will have to be higher earnings. What is it important to pay attention to what these profit margins are and how the trajectory of GDP looks like, said Eric Marshall, portfolio manager at Hodges Funds.
Investors will be paying very close attention to the price power, how companies are dealing with labor shortages and inflationary cost pressures within their business. By 2: 34 PM ET, the Dow Jones Industrial Average reached a global high of 110.15 points, or 0.31% to 35,368. In 2000, the S&P 500 gained 23.8 points, or 0.53%, up 4,510. 26 and Nasdaq Composite added 81.66 points, or 0.54%, to 15,103. The shares of Netflix were basically flat before the quarterly results later in the day. Tesla's results rose 0.2% ahead of its results on Wednesday, with investors watching closely for indications about its performance in China.
Procter Gamble Co fell 1.2%, weighing on the S&P's consumer staples sector, when it warned that higher commodity and freight costs would take a bigger bite out of earnings.
However, Walmart Inc's rose 2% after Goldman Sachs added the world's largest retailer to its Americas Conviction List Atea Pharmaceuticals Inc plunged 61.6% after its antiviral pill, developed by Roche, failed to help people with mild and moderate COVID -19.
Drugmaker Pfizer Inc that has applied for U.S. authorization for its COVID - 19 pill, gained 2.6% in the response Merck Co Inc, due to report data on its antiviral as soon as this quarter, gained 1.8%.
Advancing issues outnumbered declining ones on the Nasdaq by a 1.31 - to -1 ratio; on the NYSE, a 1.44 - to - 1 ratio favored advancers.
The S&P 500 posted 41 new 52 week highs and 1 new lows; the Nasdaq Composite recorded 69 new highs and 60 new lows.