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

Stock MarketsJul 21, 2021 06:45PM ET
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© 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.

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.

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

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Comments (13)
perplexed76 .
perplexed76 . Jul 21, 2021 11:57PM ET
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i shocked people still drinkin cola acid
Joel Schwartz
Joel Schwartz Jul 21, 2021 6:03PM ET
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Economic cheer? Why can’t the FED stop buying bonds or raise rates then? This market is a credit card in a nightclub.
Fabio falec
falec Jul 21, 2021 6:03PM ET
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Stay cash and you will pay our market bills throughout inflation. Thanks!
Drew Bednar
Drew Bednar Jul 21, 2021 6:03PM ET
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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 !!
New Jazenevd
New Jazenevd Jul 21, 2021 5:24PM ET
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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.
CHADWICK RICHINGTON
CHADWICK RICHINGTON Jul 21, 2021 5:22PM ET
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The USA is a socialist nation for the rich
Sloppy Joe
Sloppy Joe Jul 21, 2021 5:22PM ET
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USSA is at the end
Mitchel Pioneer
Mitchel Pioneer Jul 21, 2021 5:18PM ET
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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.
Sloppy Joe
Sloppy Joe Jul 21, 2021 5:16PM ET
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hehehehehe do not read this b....it guys
Stan Smith
Stan Smith Jul 21, 2021 4:56PM ET
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Strong Earnings??? from who. Only FAAMG stocks are mentioned here. Small businesses (over 50% of GDP) has evaporated forever
Stan Smith
Stan Smith Jul 21, 2021 4:54PM ET
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"Economic cheer"..said the lemming as he blindly  followed the markets off the cliff
Max German
MaxiGE Jul 21, 2021 4:21PM ET
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"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.
Max German
MaxiGE Jul 21, 2021 4:21PM ET
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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
prabhat ranjan Srivastava
prabhat ranjan Srivastava Jul 21, 2021 9:45AM ET
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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.
Mohamed Irfan Shaikh
Mohamed Irfan Shaikh Jul 21, 2021 9:45AM ET
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This is nothing but OPERATED DOW INDEX, operator create news when they see more buyers & viceversa.
Sumina Tamang
Sumina Tamang Jul 21, 2021 8:35AM ET
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(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.
Drew Bednar
Drew Bednar Jul 21, 2021 7:53AM ET
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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.
Loudermilktits Loudermilktits
Loudermilktits Jul 21, 2021 7:53AM ET
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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
YouTube Account
YouTube Account Jul 21, 2021 7:53AM ET
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Loudermilktits Loudermilktits  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
Drew Bednar Jul 21, 2021 7:41AM ET
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Drew Bednar
 
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