New York, Oct 16 (AFP/APP): Wall Street stocks surged Tuesday following a batch of mostly good corporate earnings while investors shrugged off a downcast IMF forecast that emphasized the drag from trade wars.
Shares of Dow components JPMorgan Chase, Johnson & Johnson and United Healthcare rocketed higher following strong earnings announcements.
The strong reports more than made up for a disappointing release from Goldman Sachs and raised hopes that investors have underestimated the coming earnings period.
The Dow Jones Industrial Average advanced 0.9 percent to 27,024.80.
The broad-based S&P 500 gained 1.0 percent to 2,995.68, while the tech-rich Nasdaq Composite Index jumped 1.2 percent to 8,148.71.
Expectations have been tepid for the third-quarter earnings season, which began in earnest on Tuesday. Companies in the S&P 500 were projected to report a 4.6 percent drop in earnings, according to FactSet.
“The rally is based on earnings,” said Peter Cardillo of Spartan Capital Securities. “If this keeps up we should be able to hit new records very shortly.”
The gains came despite a fresh International Monetary Fund report that lowered the 2019 and 2020 growth forecasts and warned of a “precarious” outlook if trade conflicts continue to fester.
JPMorgan jumped 3.0 percent after reporting profits of $9.1 billion, up 8.4 percent from the year-ago period in results that topped analyst expectations. Executives pointed to consumer lending businesses as especially strong.
Johnson & Johnson advanced 1.6 percent as it lifted its full-year forecasts and reported quarterly profits of $4.8 billion, up 22.9 percent. The results helped reassure investors as the health giant contends with numerous high-profile product lawsuits.
General Motors climbed 2.1 percent on signs the company may be close to a deal with the United Auto Workers to end a strike that has entered its fifth week.
Several large technology companies also climbed, with Amazon, Facebook and Google parent Alphabet winning about two percent or more.