The Dow Jones Industrial Average jumped to a record on Wednesday as investor sentiment was boosted by better-than-expected earnings reports and a new record for bitcoin.
The Dow gained 152.03 points, or 0.4%, to about 35,609.34, touching an all-time high of 35,669.69 earlier in the session. While it surpassed its high from August on an intraday basis, the 30-stock average was 0.1% from its record close.
The S&P 500 added 16.56 points, or 0.3%, to 4,536.19 and was less than 0.2% from its own record. The Nasdaq Composite retreated 0.05% to 15,121.68.
The market climbed a wall of worries over the last two months. Fears over the delta Covid surge, supply chain hiccups, a China property crisis, the Federal Reserve signaling the removal of stimulus and surging inflation reports rattled investors.
Sam Stovall, chief investment strategist at CFRA, said the market was continuing its rally from last week, which he said started with a weaker-than-expected producer prices reading and better-than-expected bank earnings.
“That kicked off this rally,” Stovall said. “I think it’s a combination of earnings. It is month-over-month changes in inflation that looks like it is peaking out and the effect of the Covid variant is slowing down.”
Stovall pointed out that the S&P 500 could also hit a record high soon, which would be a bullish sign for the market going forward.
“History shows that stock market advances following the recovery from pullbacks recorded an average price gain of 8.4% over the following 98 calendar days before slipping into a new decline of 5% or more. Favorable seasonal factors should also help power the market to additional new highs,” Stovall said about the S&P 500.
Verizon was one of the biggest gainers in the Dow, jumping 2.4% after earnings topped estimates for the third quarter. The telecom giant raised its forecast because of growing 5G adoption. Biogen shares edged lower even after it beat estimates on earnings and revenue and raised its full-year guidance.
More than 70 S&P 500 components report earnings this week and so far reports are going very well. Third-quarter earnings are on pace for a 35% increase from a year ago, according to Earnings Scout. IBM, Tesla, CSX and Las Vegas Sands are among the names set to report after the market closes.
“We believe that the stock market has more to climb in this bull market and that some of the Covid headwinds are receding even as inflation increasingly becomes a headwind, because many companies continue to have pricing power, which should preserve corporate profits,” said Chris Zaccarelli, chief investment officer for Independent Advisor Alliance.
Bitcoin soared over $66,000, notching a fresh high for the cryptocurrency, following comments Paul Tudor Jones made on CNBC’s “Squawk Box” calling …….
Source: https://www.cnbc.com/2021/10/19/stock-market-futures-open-to-close-news.html
