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Wall Street Continues Record Run as Jump in Healthcare Spurs Bullish Bets

Stock MarketsNov 02, 2021 02:43PM ET
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© Reuters.

By Yasin Ebrahim

Investing.com – The major averages continued trade near fresh record highs Tuesday, led by health care stocks amid mostly bullish quarterly results just as the Federal Reserve kicks off its two-day meeting.

The S&P 500 rose 0.35% and hit an earlier all-time high of 4,635.30. The Dow Jones Industrial Average was up 0.39%, or 140 points to an intraday record of 36,088.10. The Nasdaq climbed 0.10%, and had earlier notched a record of 15,656.60.

Health care stocks led the broader market higher, with McKesson and Pfizer among the top gainers after reporting better-than-expected quarterly results.

Pfizer (NYSE:PFE) lifted its full-year guidance following third-quarter results that beat analysts' consensus on both the top and bottom lines, driven by strong vaccine demand. The drug maker's shares jumped more than 4%.

Investors are also awaiting news later Tuesday from a CDC meeting on whether to expand vaccine eligibility to children of ages 5 to 11.

McKesson (NYSE:MCK) third-quarter results also topped Wall Street estimates and the drug distributor raised its full-year earnings guidance, sending its shares up nearly 6%.

Technology, meanwhile, shrugged off its sluggish start to the week to rack up gains amid a more than 1% move in Apple (NASDAQ:AAPL), Google-parent Alphabet (NASDAQ:GOOGL) and Microsoft (NASDAQ:MSFT).

Other big cap tech traded mixed as Facebook-parent Meta Platforms (NASDAQ:FB), and Amazon (NASDAQ:AMZN) fell.

Semiconductor also pushed the broader tech sector higher following stronger than expected results from Apple chip supplier On-Semiconductor.

ON Semiconductor Corporation (NASDAQ:ON) rallied 4% to a record high after guiding fourth-quarter guidance on revenue and earnings above estimates. The upbeat results drew a flurry of positive commentary from Wall Street, with Baird raising its price target to $75 from $60.

But not all sectors were participating in the melt up on Wall Street, with energy and consumer discretionary in the red.

Consumer discretionary stocks were weighed down by a fall in Tesla (NASDAQ:TSLA) after its CEO Elon Musk appeared to cool some optimism on the Hertz order for 100,000 Tesla.

Under Amour eased some of losses in the sector after surging more than 16% after raising its full-year guidance amid quarterly results that topped analysts' expectations.

Energy was down more 1% as oil prices drifted lower ahead of fresh weekly U.S. petroleum data expected to show a rise in crude stockpiles.

The 10-year Treasury yield, meanwhile, fell 2% as investors as the Fed kicked off its two-day meeting.

The Fed is expected to announce its taper on monthly bond purchases, and keep interest rate unchanged, but the central bank's insight into inflation is expected to garner most of the attention.

Ahead of the Fed decision, investors see downside risks rather upside risks to equities.

"There is more risk to the downside for equities heading into the Fed decision," Melissa Brown, managing director of applied research at Qontigo, told Investing.com on Tuesday. "Monthly data pointing to supply chain issues or that people don't necessarily want to take up the jobs that are available has to lead to higher inflation."

Still, risk sentiment remains intact as investors are shifting out of defensive corners of the market to riskier sectors like small cap and higher-valuation growth stocks.

"Investors seem to be moving now more away from the really defensive sectors or the defensive kind of styles and getting a little bolder," Brown added.

Wall Street Continues Record Run as Jump in Healthcare Spurs Bullish Bets
 

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Comments (4)
Stan Smith
Stan Smith Nov 02, 2021 4:19PM ET
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These 'fresh' record highs stink to high heaven... !
Steffen vdm
Steffen vdm Nov 02, 2021 3:58PM ET
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This market has reached the next and final phase of it's addiction: substance (stimulus) use is compulsive and out of control
Jon Bal
Jon Bal Nov 02, 2021 3:51PM ET
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$4B order = +$300B market cap....checks out....I mean Biden says $3T = $0 so anything goes these days.
John Lakran
John Lakran Nov 02, 2021 3:31PM ET
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Basically straight up since Mid Oct so I don't see how investors see downside risk here and just keep on blindly buying after this ridiculous ride since last March
Joe Messeri
Joe Messeri Nov 02, 2021 3:31PM ET
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Ive been out and switched most of my portfolio since 1/15 to fixed income. I have a good chunk in cash and when a significant pull back occurs I will buy index funds and some names with value
 
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