US STOCKS-Wall St ticks higher on upbeat corporate earnings

U.S. stocks rose in choppy trading on Tuesday, with the S&P 500 scaling a new peak after a batch of upbeat earnings updates including Johnson & Johnson's strong profit forecast and 3M's quarterly profit beat. J&J added 3%, and was the top gainer on the Dow, as the drugmaker also said it expected to report eagerly awaited COVID-19 vaccine data early next week.

Reuters | Washington DC | Updated: 27-01-2021 11:37 IST | Created: 26-01-2021 22:46 IST
US STOCKS-Wall St ticks higher on upbeat corporate earnings
Representative image Image Credit: Public Domain Pictures

U.S. stocks rose in choppy trading on Tuesday, with the S&P 500 scaling a new peak after a batch of upbeat earnings updates including Johnson & Johnson's strong profit forecast and 3M's quarterly profit beat.

J&J added 3%, and was the top gainer on the Dow, as the drugmaker also said it expected to report eagerly awaited COVID-19 vaccine data early next week. 3M Co climbed 3.1% as it benefited from lower costs and demand for disposable respirator masks, hand sanitizers and safety glasses amid a surge in coronavirus infections.

"The earnings season has been very positive," said Albert Brenner, director of investment and economic research at People's United Advisors in West Hartford, Connecticut. "We're going to continue to see strong growth in revenue and earnings from tech companies, the question will be whether it will be sufficient to satisfy market expectations."

Tech heavyweights Microsoft Corp and Advanced Micro Devices Inc rose about 1% ahead of their earnings report after markets close. Five of the 11 S&P sectors rose, with consumer staples and communication services leading gains.

Few if any changes are expected in the U.S. Federal Reserve's policy statement at the end of a two-day meeting on Wednesday, with Fed Chair Jerome Powell likely to address inflation in his post-meeting news conference. With the S&P 500 trading at 22 times the 12-month forward earnings, concerns about stock bubbles on Wall Street are sparking fears of a pullback. Investors are keeping an eye out for forecasts from corporate America to justify these higher valuations.

In focus is progress in stimulus talks, with U.S. Senate Majority Leader Chuck Schumer saying Democrats will move forward on U.S. President Joe Biden's coronavirus relief plan without Republican support if necessary. "We would not be surprised by increased volatility in response to news that vaccines are going to be challenged going forward with new coronavirus variants coming up," Brenner said.

The CBOE volatility index, Wall Street's fear gauge edged higher for the third straight day. At 11:33 a.m. ET the Dow Jones Industrial Average rose 24.65 points, or 0.08%, to 30,984.65, the S&P 500 lost 0.59 points, or 0.02%, to 3,854.77, and the Nasdaq Composite gained 9.96 points, or 0.07%, to 13,645.95.

Videogame retailer GameStop Corp jumped 20% after surging 144% a day earlier, as individual investors again piled into a number of niche stocks, prompting short sellers to scramble to cover losing bets. General Electric Co jumped 14% after the industrial conglomerate offered an upbeat outlook for its business this year and reported a surge in quarterly free cash flow.

American Express Co fell 2% after it posted a 15% drop in quarterly profit, as pandemic-led lockdowns and business restrictions kept the credit card issuer's members from traveling and dining out. Declining issues outnumbered advancers for a 1.1-to-1 ratio on the NYSE and a 1.3-to-1 ratio on the Nasdaq.

The S&P 500 posted 25 new 52-week highs and no new low, while the Nasdaq recorded 391 new highs and 18 new lows.

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


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