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US STOCKS-Wall St edges back, helped by bargain hunters

Updated: 31-10-2018 00:36 IST
Major U.S. stock indexes posted modest gains on Tuesday, helped by gains for chip stocks as investors took advantage of cheaper prices following a steep recent pullback for equities.

The consumer staples sector, boosted by Coca-Cola shares, was among the leading sectors a day after a volatile session that pushed the benchmark S&P 500 close to confirming its second correction of 2018.

However, stocks ended off their session lows on Monday and clawed back further on Tuesday.

"This is a continuation of the recovery we saw yesterday,” said Hugh Johnson, chief investment officer with Hugh Johnson Advisors in Albany, New York.

"The silver lining behind the dark cloud is that it's driven stocks to a level that's meaningfully under-valued," Johnson said.

The Dow Jones Industrial Average rose 175.96 points, or 0.72 percent, to 24,618.88, the S&P 500 gained 11.65 points, or 0.44 percent, to 2,652.9 and the Nasdaq Composite added 19.58 points, or 0.28 percent, to 7,069.87.

S&P 500 companies are on pace to have posted a 25.3 percent rise in third-quarter earnings with more than half of the constituents having reported, according to I/B/E/S data from Refinitiv.

But despite the big overall profit increase, some high-profile companies have issued disappointing reports. On Tuesday, General Electric shares tumbled 10.5 percent after its report in which the conglomerate drastically reduced its dividend and said it faced a deeper accounting probe.

“As earnings roll in, most of them have been OK," said Rick Meckler, partner at Cherry Lane Investments in New Vernon, New Jersey.

"It’s just that some of the misses have been of the most well-known companies and it has kind of overshadowed a little bit of the better earnings of smaller companies or less iconic companies.”

The Philadelphia semiconductor index jumped 2.4 percent, with Intel surging 4.2 percent and giving a big boost to the S&P 500.

Chip stocks had broadly dropped on Monday, as renewed concerns about U.S.-China trade tensions sparked declines for the market.

U.S. President Donald Trump said he thinks there will be "a great deal" with China on trade, but warned that he has billions of dollars' worth of new tariffs ready to go if a deal is not possible.

Chip stocks also gained following a better-than-expected report from chip-gear maker KLA-Tencor, whose shares rose 6.1 percent.

In other earnings news, Coca-Cola Co's shares rose 1.5 percent after the beverage maker's quarterly revenue and profit topped Wall Street expectations.

Under Armour Inc's shares surged 22.8 percent after the sportswear maker's upbeat quarterly earnings and full-year profit forecast.

Advancing issues outnumbered declining ones on the NYSE by a 1.50-to-1 ratio; on Nasdaq, a 1.53-to-1 ratio favored advancers.

The S&P 500 posted 10 new 52-week highs and 25 new lows; the Nasdaq Composite recorded 14 new highs and 189 new lows. (Additional reporting by Sinead Carew in New York and Shreyashi Sanyal in Bengaluru; Editing by Sriraj Kalluvila and James Dalgleish)

(This story has not been edited by Devdiscourse staff and is auto-generated from a syndicated feed.)