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S&P 500, Dow rise on optimism over earnings reports, stimulus

Published 07/21/2020, 06:37 AM
Updated 07/21/2020, 11:55 AM
© Reuters. The front facade  of the of the NYSE is seen in New York

© Reuters. The front facade of the of the NYSE is seen in New York

By Medha Singh and Devik Jain

(Reuters) - The S&P 500 and the Dow indexes rose on Tuesday following a slate of positive earnings reports from companies including IBM and Coca-Cola, and on optimism over an eventual vaccine and fiscal stimulus to revive a pandemic-battered economy.

The Nasdaq eased after hitting an intraday record high at the start of the session, as shares of Amazon.com Inc (O:AMZN) fell 1.7% following a near 8% jump a day earlier.

Energy (SPNY) jumped 6%, more than any other S&P sectors, tracking an uptick in oil prices on prospects of higher demand for fuel. [O/R]

Technology (SPLRCT) and consumer discretionary (SPLRCD), which are the best performing sectors this year, slipped.

"We've started to reposition portfolios a little bit away from what's seen as a long-term structural winners, in favor of companies that haven't really participated as much in the upside of what markets have done," said Matt Stucky, portfolio manager, equities, at Northwestern (NYSE:NWE) Mutual Wealth Management Co in Milwaukee, Wisconsin.

Promising early data from trials of three potential vaccines helped the S&P 500 close in the green for the year on Monday.

With the second quarter expected to see the worst of the pandemic's hit on profits, investors are more focused on hints on how long Corporate America would take to bounce back.

International Business Machines Corp (N:IBM) gained 1.5% after it signaled higher demand in its cloud computing business, as large corporations accelerate their digital shift.

Coca-Cola Co (N:KO) rose 3.2% as it said demand for its sodas were improving after the "most challenging" quarter for the year.

"Commentary on earnings call has been really important to investment communities, confirming the recovery story that's seen in the broad (economic) data applied to individual businesses, like Coca Cola," Stucky said.

Graphic: S&P 500 is about 4% from it's Feb.19 record close - https://fingfx.thomsonreuters.com/gfx/mkt/dgkpldmrkpb/spx%20chart1.PNG

U.S. lawmakers and White House officials headed into a day of negotiations on Capitol Hill on Tuesday, aimed at hammering out an agreement on new coronavirus aid legislation as infections and deaths surged to record levels across the country.

The U.S. government has less than two weeks to agree on a legislative package before additional unemployment assistance runs out for tens of millions of Americans.

Overnight, European Union leaders agreed on a massive coronavirus relief program.

At 11:05 a.m. ET, the Dow Jones Industrial Average (DJI) was up 315.72 points, or 1.18%, at 26,996.59 and the S&P 500 (SPX) was up 21.13 points, or 0.65%, at 3,272.97. The Nasdaq Composite (IXIC) was down 14.20 points, or 0.13%, at 10,752.89.

Lockheed Martin Corp (N:LMT) rose 2% as the U.S. weapons supplier raised its full-year profit and revenue forecasts, driven by higher quarterly sales in its aeronautics unit that makes the F-35 fighter jet.

Advancing issues outnumbered decliners by a 4.52-to-1 ratio on the NYSE and by a 2.09-to-1 ratio on the Nasdaq.

© Reuters. The front facade  of the of the NYSE is seen in New York

The S&P index recorded 40 new 52-week highs and no new low, while the Nasdaq recorded 107 new highs and six new lows.

Latest comments

Dow rises on dow rising. At this point these justification for the Dow rising are meaningless this market is pure gambing
The Dow is going to close at the Highs of the day today.
Maybe I am the only one here but I have been ****it on the day trading. I am actually loving the volatility right now. I built another 50K portfolio for my kids with just the weekly profits getting in and out.
How old are your kids?
These articles are insulting and amount to rank collaboration with Trump. If not before, this market will crash after Election Day. Its Trump's market, completely. Without Trump, this market wouid be in the toilet, where it belongs.I can wait for a new government.
Dow is up. Vix is up. I'm no guru, but that usually means the Dow will sell off at least a couple hundred tonight.
it wont.. nq is why the vix is up.. dow will close up today.. about 250 on the futures
Right before Trump's conference on new treatments and vaccine current efficacy and developments, and the pharmacy statements following... that would lead to some nice regret tomorrow morning.
Optimism and hope does nothing for my account balance...works for Wall St. though
now this stimulus word is becoming a pain indeed. Everytime vaccine hopes and stimulus. wth
recovery hopes
Get ready for a market boost as the Trump conferences on the pandemic will resume, focusing on results and developments from vaccine trials and those new drugs already in use in hospitals. Doubt the media is gonna boycott the pharma industry that is going to make a presence there, since they are in bed with each other.
Don't let the big pharma charge us, the tax payer, for their government funded vaccine.
If earnings are so great why is more taxpayer funded stimulus required?
because that is what made the earning so great... But what the heck im down for more stimulus
dozing out trillions like cookies out of oven. lol
dude they r red sp500 and dow
optimism & hope should launch an IPO. it will have a valuation higher than Amazon. Every day, all I read is nonsense & complete balderdash. We will all pay for financial hubris
usd crash 🤣🤣 gold fly high. nice trump era 😏
People are high on stimulus drugs. More stimulus pls
Upbeat earning but still need stimulus. 99% of the population in deep sheet while the top 1% gain more numbers in their account.
losers putting anything in the news.
I'm realizing how speculative and irresponsible a lot of reporting concerning financial markets are. it's scary. eporters really attribute the market rising and falling to whatever they feel like and put whatever spin they want on earnings or any type of news. this article in particular isn't too bad but it's the last in line of a few I've read that printed assumptions and opinions with such strong conviction.
very Well put Shanell!a lot of reports are so speculative causing overeactions and false swings in the markets.
Can you ask the fed to print me more hope? Im losing it
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