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Wall Street Opens Higher as Earnings Restore Momentum; Dow up 180 Ptts

Stock MarketsJul 21, 2021 09:43AM ET
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© Reuters.

By Geoffrey Smith 

Investing.com -- U.S. stock markets opened higher on Wednesday after a generally strong barrage of corporate earnings ensured that Tuesday's rebound extended into the new session. 

By 9:40 AM ET (1340 GMT), the Dow Jones Industrial Average was up 181 points, or 0.5%, at 34,693 points. The S&P 500 was up 0.4% and the Nasdaq Composite was up 0.2%. 

The Nasdaq's underperformance was down in part to Netflix (NASDAQ:NFLX), whose disappointing subscriber growth forecast for the next quarter was a sober reminder that the sugar rush enjoyed by winners from the pandemic can't last forever.

Netflix stock was one of very few in the red, losing 2.6%. Another was Harley-Davidson (NYSE:HOG) stock, which fell 4.1% after the motorcycle maker revised down its operating income forecast due to the impact of EU tariffs. 

Most other companies to report over the last few hours saw their stock prices rise, however. Chipotle Mexican Grill (NYSE:CMG) stock rose 8.5%, as reopened restaurants and rebounding sales more than outweighed warnings about higher input costs, from both raw materials and labor.  Likewise, Verizon (NYSE:VZ) stock rose 1.1% after it reported steady progress in the uptake of its 5G services, while United Airlines  (NASDAQ:UAL) stock rose 3.7% after it reported a sharp narrowing of its net loss in the second quarter. Coca-Cola (NYSE:KO) stock rose 2.4% as the reopening of economies across the world lifted sales across all its product lines. 

The market was undaunted by reports suggesting that the $3.5 trillion infrastructure bill pushed by Senate Democrats is unlikely to pass a procedural vote later Wednesday that would block the risk of a filibuster. Nor was it fazed by a fresh drop in weekly mortgage applications, a further sign that the red-hot housing market may be cooling off. Thirty-year mortgage rates have come down by some 25 basis points since April, as fears about inflation have given way to concerns about the sustainability of the economic recovery.

"This is going to sound odd but Monday's selloff was the best news that happened to the markets this year," said Lena Komileva of G+ Economics, via Twitter. "It was cathartic: markets have priced out the reopening and discounted the recovery."

European ADRs were also broadly stronger after some notable second-quarter releases. ASML (NASDAQ:ASML), the Dutch company that makes printing machines for semiconductors, rose 3.2% after raising its revenue growth forecast for this year to 35%, a clear sign of its ability to push up prices as chipmakers scramble for additional capacity. Daimler  (OTC:DDAIF) however underperformed after the maker of Mercedes-Benz cars and trucks warned that third-quarter sales would fall due to the short-term shortage of chips.

Elsewhere, Xpeng (NYSE:XPEV)ADRs rose 7.0%, in what appeared a delayed reaction to the launch of the electric vehicle maker's new sedan in China at a price that undercuts Tesla (NASDAQ:TSLA)'s Model 3 comfortably. Xpeng earlier this month completed a public offering in Hong Kong that has changed the dynamic of price formation for the ADRs, in that Chinese investors now get to react first to the company's news.

 

 

Wall Street Opens Higher as Earnings Restore Momentum; Dow up 180 Ptts
 

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Comments (9)
michael engel
michael engel Jul 21, 2021 11:18AM ET
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Moderna took off in hypersonic speed. Dr Mei Hong MIT, in her lab, discovered the corona virus backbone, ribs and the "Ions Channels" in between. Pharma co will find the optimal way to fill the channels, block, choke the virus and break it's backbone by taking an existing, approved already pills, not another Moderna shot, to win the global pandemic war.
Mitchel Pioneer
Mitchel Pioneer Jul 21, 2021 10:26AM ET
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And as predicted before yesterday's open, the miraculous 2-day loss "recovery" is complete.  Fraudulent, criminally manipulated joke.  Assume the position America.
AI Wu
AI Wu Jul 21, 2021 10:26AM ET
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The money is being made by trapping the opposite side. It’s a game in the age of financial nihilism. Narrative is attached to mask the game rules.
Paul Richard
Paul Richard Jul 21, 2021 10:26AM ET
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I have the position. sp500 that is, join in before too late!
Stan Smith
Stan Smith Jul 21, 2021 10:18AM ET
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Phew!!! thought Covid and Inflation was here to stay...LOL
Axel Hippocrate
Axel Hippocrate Jul 21, 2021 10:04AM ET
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Netflix and chill
Michael Chen
Michael Chen Jul 21, 2021 10:01AM ET
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Fed wants strong dollars to slow down the inflation. Higher tax to increase govt infrastructure
Ememobong Barnaby
Ememobong Barnaby Jul 21, 2021 10:00AM ET
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liquidation 🤔🤔🤔
Ben Ramirez
Ben Ramirez Jul 21, 2021 9:54AM ET
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Never seen so much manipulation in my life..Gordon Gekko is prime evil
Ganesh Nagarkoti
Ganesh Nagarkoti Jul 21, 2021 9:54AM ET
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whats your take on this bull rally
Anderson Fitzgerald
Anderson Fitzgerald Jul 21, 2021 9:51AM ET
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free money, not free for me. USD is trash
Ricardo Diogo
Rcd72 Jul 21, 2021 9:46AM ET
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bullying the free money....so fake...
 
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