Wall Street rallied sharply on strong corporate earnings

  • Boeing jumps on deal to sell 777 jets to partners
  • Johnson & Johnson and IBM fall on dollar impact warning
  • Halliburton, Hasbro, Truist rise after profits
  • Index: Dow 2.43%, S&P 500 2.76%, Nasdaq 3.11%
  • The Nasdaq’s biggest one-day percentage gain since June 24

July 19 (Reuters) – U.S. stocks ended with sharp gains on Tuesday, as several companies joined big banks in reporting earnings that beat forecasts, giving respite to investors worried about high inflation and the central bank cutting corporate bottom lines.

S&P 500 (.SPX) It rose 2.8%, its highest finish since June 9. A tech-heavy Nasdaq composite (.IXIC) Added 3.1%, marking the biggest one-day percentage gain since June 24.

Halliburton’s stock(HAL.N)The oilfield services provider rose 2.1% after posting a 41% rise in quarterly adjusted profit. Read more Toymaker Hasbro Inc (HAS.O)Gained 0.7% after reporting better-than-expected quarterly profit. read more

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Truist Financial Corp beat market estimates for quarterly profit, lifting the bank’s shares by 2.6%.

“Earnings have come in better than lower expectations,” said Paul Kim, CEO of Simplify Asset Management in New York.

“So, we don’t see the fear of tighter monetary policy and inflation affecting earnings.”

Johnson & Johnson shares lost 1.5%, reversing earlier gains. The healthcare giant reported better-than-expected profit and sales, but cut its earnings outlook for the year due to a stronger U.S. currency. read more

A strong dollar also weighed on shares of IT hardware and services giant IBM Corporation (IBM.N)Quarterly earnings on Monday beat expectations but warned that the foreign exchange hit for the year would be around $3.5 billion.

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A Wall Street sign outside the New York Stock Exchange in New York City, New York, U.S., October 2, 2020, REUTERS/Carlo Allegri

The U.S. dollar marked its third straight day of decline as markets cut odds of a full percentage point Federal Reserve rate hike this month.

The spiraling inflation initially led markets to a 100-basis-point hike in interest rates at the upcoming Fed meeting later this month, until some policymakers signaled a 75-basis-point increase. read more

Dow Jones Industrial Average (.DJI) The S&P 500 rose 754.44 points, or 2.43%, to 31,827.05. (.SPX) The Nasdaq Composite rose 105.84 points, or 2.76%, to 3,936.69. (.IXIC) It added 353.10 points, or 3.11%, to 11,713.15.

“The macro picture hasn’t changed,” Kim said. “We still have falling earnings, high inflationary pressures and a tight central bank. So in the long run, I don’t think this type of rally has staying power.”

This earnings season, analysts expect full-year S&P 500 profit to grow 5.8%, up from an estimate of 6.8% at the start of the quarter, according to Refinitiv data.

Volume in US equities was 10.95 billion shares, compared to the full session’s average of 11.76 billion over the last 20 trading days.

Advancing issues outnumbered declining ones on the NYSE by a 4.88-to-1 ratio and on the Nasdaq, a 3.40-to-1 ratio favored advancers.

The S&P 500 posted a new 52-week high and a new 30-week low; The Nasdaq Composite posted 31 new highs and 56 new lows.

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Echo Wang’s statement in New York; Additional reporting by Sreyashi Sanyal and Aniruddha Ghosh in Bangalore; Editing by Arun Koiyur, Shaunak Dasgupta and Deepa Babington

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