Get 40% Off
🤯 This Tech Portfolio is up 29% YTD! Join Now to Get April’s Top PicksGet The Picks – Just 99 USD

Wall Street ends higher, powered by strong earnings, economic cheer

Published 07/21/2021, 07:29 AM
Updated 07/21/2021, 06:45 PM
© Reuters. FILE PHOTO: People wearing face masks walk by the New York Stock Exchange (NYSE) during the outbreak of the coronavirus disease (COVID-19) in New York City, New York, U.S., July 19, 2021. REUTERS/Andrew Kelly

© Reuters. FILE PHOTO: People wearing face masks walk by the New York Stock Exchange (NYSE) during the outbreak of the coronavirus disease (COVID-19) in New York City, New York, U.S., July 19, 2021. REUTERS/Andrew Kelly

By Stephen Culp

NEW YORK (Reuters) - Wall Street stocks posted their second straight daily gain on Wednesday, with robust corporate earnings and renewed optimism about the U.S. economic recovery fueling a risk-on rally.

All three major U.S. stock indexes added to their previous session's advance, placing all three within 1% of their all-time closing highs.

Economically sensitive smallcaps, semiconductors and financials outperformed the broader market.

"It’s a seesaw going on between great earnings and a recovering market and concerns over whether the economy is going to slow down because of the (COVID-19) Delta variant," said Peter Tuz, president of Chase Investment Counsel in Charlottesville, Virginia. "But we’re seeing strong earnings with generally positive guidance, and the feeling that (the Delta variant) can be managed."

A rebound in travel helped fuel United Airlines' revenue beat, boosting its stock by 3.8%.

The S&P 1500 Airlines index gained 3.3%, while the S&P 1500 Hotels, Restaurant and Leisure index advanced 2.9%.

"Earlier in the week those stocks suffered because of renewed fears that travel will slow down and all related industries will suffer, but those fears have gone away," Tuz added. "Demand is continuing as expected, I don’t think the Delta fear is causing people to change their plans."

Benchmark U.S. Treasury yields continued their bounce from five-month lows following a weak 20-year bond auction, which benefited rate-sensitive banks.

Wrangling in Washington over the passage of a bipartisan $1.2 trillion infrastructure package progressed as Senate Democrats moved toward a planned procedural vote despite Republican appeals for a delay.

The Dow Jones Industrial Average rose 286.01 points, or 0.83%, to 34,798, the S&P 500 gained 35.63 points, or 0.82%, to 4,358.69 and the Nasdaq Composite added 133.08 points, or 0.92%, to 14,631.95.

Of the 11 major sectors in the S&P 500, energy stocks were the big winners, jumping 3.5% with the help of surging crude prices. [O/R]

Second-quarter reporting season has shifted into overdrive, with 73 of the companies in the S&P 500 having posted results. Of those, 88% have beaten consensus expectations.

Among the winners, Chipotle Mexican Grill (NYSE:CMG) jumped 11.5% after the burrito chain beat earnings estimates and forecast strong current-quarter sales growth. The stock boasted the S&P 500's largest percentage gain.

Coca-Cola (NYSE:KO) rose 1.3% after raising its full-year forecast.

Interpuplic Group of Companies jumped 11.3% in the wake of its upbeat earnings release.

Drugmaker Johnson & Johnson (NYSE:JNJ) forecast $2.5 billion in sales from its one-shot COVID vaccine this year and hiked its sales estimates. It closed up a modest 0.6%.

On the losing side, Netflix Inc (NASDAQ:NFLX) late Tuesday reported slowing subscriber growth, sending its shares down 3.3%, the second-largest percentage loser in the S&P 500.

Harley-Davidson (NYSE:HOG)'s second-quarter earnings release showed its turnaround plan appeared to be making progress, but the company lowered its operating income guidance due to tariffs from Europe, its second-biggest market. Its stock dropped 7.2%.

Texas Instruments (NASDAQ:TXN) dipped more than 3% in extended trading following results posted after the bell.

Advancing issues outnumbered declining ones on the NYSE by a 2.92-to-1 ratio; on Nasdaq, a 3.21-to-1 ratio favored advancers.

© Reuters. FILE PHOTO: People wearing face masks walk by the New York Stock Exchange (NYSE) during the outbreak of the coronavirus disease (COVID-19) in New York City, New York, U.S., July 19, 2021. REUTERS/Andrew Kelly

The S&P 500 posted 38 new 52-week highs and no new lows; the Nasdaq Composite recorded 66 new highs and 34 new lows.

Volume on U.S. exchanges was 9.13 billion shares, compared with the 10.17 billion average over the last 20 trading days.

Latest comments

i shocked people still drinkin cola acid
Economic cheer? Why can’t the FED stop buying bonds or raise rates then? This market is a credit card in a nightclub.
Stay cash and you will pay our market bills throughout inflation. Thanks!
Economic cheer bolstered by the Gov !! How much longer does this go on. We are at an Earnings Peak right now right here today. All the beats I see despite further raising guidance warns of costs which will significantly hurt margins til year end. Even the vehicle makers who are cherring like crazy over vehicle sales warn ......chip shortages !!! How much do companies pass on those costs or do they take the hit ??!! High Inflationary pressure will further rear its ugly head and that will further dampen the markets . What happens when the consumer pulls back on spending habits. Can you say 10 plus % market correction. The virus still determines the direction of the market in the near term. Watch the swings to and fro !!
Another market dip is over. It was shallow and brief, and was met by strong buying. Every dip is a buying opportunity in this money-printing environment and the buying must be done quick, dips are brief and shallow.
The USA is a socialist nation for the rich
USSA is at the end
And a flagrant dose of fraud in the final minutes to set a closing high.  When's the last time the US Ponzi Scheme, greatest financial fraud in history, and biggest investment joke in the world set a closing low?  Criminally manipulated joke.
hehehehehe do not read this b....it guys
Strong Earnings??? from who. Only FAAMG stocks are mentioned here. Small businesses (over 50% of GDP) has evaporated forever
"Economic cheer"..said the lemming as he blindly  followed the markets off the cliff
"strong earnings" coca sees demand of 2019 cause there are also 200M more people on the world aswell, verizon a +1% YoY beat lol great earnings.
oh yea a vaccin maker who is selling everydzy doses of vaccines wont make more profits lol, & harley davidson sees demand just like they say every year
Few days back DOW fell sharply and reason assigned wAs increasing case of delta plus variant of vividh. Within 2 days things e back to normal and now u guys r assigning some positive reason. Let us not create confusion.
This is nothing but OPERATED DOW INDEX, operator create news when they see more buyers & viceversa.
(Reuters) - U.S. stock index futures rose on Wednesday, helped by upbeat quarterly results and forecasts from companies such as Johnson & Johnson (NYSE:JNJ) and Harley Davidson, while shares linked to economic growth also climbed.
We are at an earnings peak !! The D variant and increasing cases will drag on the markets for the remaining months of 21 into 22. Definitely gonna slow no matter how much money the consumer may have on the sidelines. Pick your stocks wisely because with rising labor costs, material costs and the likes margins will shrink.... hence this is the E Peak !! Yes....we will have major swings up and down like back in Oct of 20 but ultimately earnings will not be where they can be until more vaccinations happen throughout the world not just in one specific country. That will take lots of time. The consumer always remains the key.
Who cares about unvaccinated people in developed nations like the US? I know I don't. They have had numerous opportunities. The rest of us won't let them drag us down
 Can't wait to discover the long-term side effects of these emergency gene therapy injections. Who will care about the vaxxed when they begin to suffer chronic health conditions and general sterility? I know I won't. It's already too late for them. The rest of us won't let them drag us down
Drew Bednar
Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.