Shares Rise in Big Earnings Week -- WSJ
October 22 2019 - 3:02AM
Dow Jones News
By Karen Langley and Caitlin Ostroff
This article is being republished as part of our daily
reproduction of WSJ.com articles that also appeared in the U.S.
print edition of The Wall Street Journal (October 22, 2019).
U.S. stocks inched higher Monday to start a busy week of
corporate earnings, while investors continued to track developments
in the U.K.'s divorce from the European Union.
This is the busiest week of the quarter for corporate earnings,
and results so far have beaten analysts' expectations. Those
expectations were low, however, with analysts as of Sept. 30
estimating a 4% decline in third-quarter earnings for S&P 500
companies, according to FactSet.
Shares of oil-field services company Halliburton added 6.4%
Monday after reporting cost cuts and a better-than-expected
outlook. Even with the rally, the stock is down 26%
year-to-date.
"So far we've seen the out-of-favor stocks react positively to
earnings, " said Olivier Sarfati, head of equities at GenTrust.
"But we haven't seen the in-favor stocks that everybody else owns
because they haven't reported yet."
Among the companies scheduled to report later this week are
Microsoft, Amazon and Twitter.
The S&P 500 climbed 20.52 points, or 0.7%, to 3006.72, with
nine of 11 sectors rising. Only the materials and health-care
segments ended in the session in the red. The technology-laden
Nasdaq Composite gained 73.44 points, or 0.9%, to 8162.99.
The Dow Jones Industrial Average edged up 57.44 points, or 0.2%,
to 26827.64, weighed down by a decline in the shares of Boeing
after the Wall Street Journal reported that Congress was
intensifying scrutiny of the plane maker.
All three major indexes are within about 2% of their July record
highs.
Investors are also looking ahead to the Federal Reserve's
meeting later this month, when the central bank is expected to
lower interest rates again, after two recent rate cuts.
Sentiment has risen in recent days, helped by a "phase one"
trade deal between the U.S. and China that prevented additional
tariffs from taking effect. Trade officials from the two countries
were to continue discussing a partial deal that could be signed by
President Trump and Chinese President Xi Jinping.
"The pieces are falling into place for an upturn in global
growth," said Joe Quinlan, head of CIO Market Strategy for Merrill
and Bank of America Private Bank. "This is exactly what equities
are suggesting."
In other corporate news, Boeing shares fell 3.8% -- weighing on
the Dow -- after The Wall Street Journal reported that Congress is
ramping up scrutiny of the plane maker's leaders as new details
pointed to undue management pressure on employees.
Shares of drug companies AmerisourceBergen, Cardinal Health and
McKesson fell after the Journal reported the companies reached a
last-minute settlement, avoiding a trial seeking to blame them for
fueling the opioid crisis. AmerisourceBergen fell 3.3%, Cardinal
Health dropped 2.2% and McKesson lost 3.2%.
Cosmetics maker Coty shares rallied 13% after the company said
it would explore strategic alternatives for its professional beauty
business.
The yield on the 10-year U.S. Treasury rose to 1.794% from
1.747% Friday. Bond yields rise as prices fall.
In the U.K., the British pound posted small losses and gains
against the dollar, briefly climbing past the psychological barrier
of $1.30, after a critical vote on Prime Minister Boris Johnson's
Brexit deal was delayed.
"We're going to have that kind of ebbing and flowing," said
David Madden, market analyst at CMC Markets. "It's just going to be
hanging around to find out what's happening."
The U.K.'s FTSE 100, which includes many companies with large
overseas earnings that benefit from sterling's decline, edged up
0.2%. The pan-continental Stoxx Europe 600 index rose 0.6%.
Write to Caitlin Ostroff at caitlin.ostroff@wsj.com
(END) Dow Jones Newswires
October 22, 2019 02:47 ET (06:47 GMT)
Copyright (c) 2019 Dow Jones & Company, Inc.
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