By Stephen Culp | 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.
“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’ (UAL.O) revenue beat, boosting its stock by 3.8%.
“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. read more
The Dow Jones Industrial Average (.DJI) rose 286.01 points, or 0.83%, to 34,798, the S&P 500 (.SPX) gained 35.63 points, or 0.82%, to 4,358.69 and the Nasdaq Composite (.IXIC) added 133.08 points, or 0.92%, to 14,631.95.
Of the 11 major sectors in the S&P 500, energy stocks (.SPNY) were the big winners, jumping 3.5% with the help of surging crude prices .
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 (CMG.N) 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. read more
Interpuplic Group of Companies (IPG.N) jumped 11.3% in the wake of its upbeat earnings release.
Harley-Davidson’s (HOG.N) 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%. read more
Texas Instruments 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.