Wall Street indexes surge after sharp selloff as strong results boost IBM
Wall Street’s main indexes rose on Tuesday, as economically sensitive stocks rebounded after a sharp selloff in the previous session, while International Business Machines (IBM) jumped on strong second-quarter results.
Shares of the blue-chip technology firm climbed 3.7% as brokerages raised their price targets on the stock following robust growth in the company’s cloud and consulting businesses.
Nine of the 11 major S&P 500 sector indexes were trading higher, with the S&P 500 banks index rising 0.7%.
Focus is now on earnings reports from companies such as Netflix Inc and Chipotle Mexican Grill due later in the day.
The second-quarter earnings season is underway, with 41 companies on the S&P 500 having reported their numbers so far. Of those, 90% have beaten consensus estimates, Refinitiv data showed.
Analysts now expect a year-on-year S&P 500 earnings growth of 72% for April-June period, as per Refinitiv data.
Wall Street’s main indexes ended sharply lower on Monday, with the blue-chip Dow Jones index logging its worst day in nearly nine months, as a surge in Delta variant infections sparked a broad sell-off on fears about renewed COVID-19 shutdowns and a protracted economic recovery.
“We have been in a straight line, almost straight up, and the market needs to shake it off once in a while. It (Delta variant) was an excuse to accelerate some selling yesterday,” said Anthony Minopoli, chief investment officer at Knights of Columbus Asset Advisors.
“We’re looking at the Delta variant as a short-term situation but really more focused on what’s happening with employment, inflation and keeping an eye on if there’s any change in tone coming from the Fed.”
At 9:43 a.m. ET, the Dow Jones Industrial Average was up 231.32 points, or 0.68%, at 34,193.36, the S&P 500 was up 16.57 points, or 0.39%, at 4,275.06 and the Nasdaq Composite was up 13.12 points, or 0.09%, at 14,288.10.
Shares of cryptocurrency and blockchain-related firms Coinbase Global, Riot Blockchain, Marathon Patent Group, and MicroStrategy Inc fell between 2.4% and 4.3% as bitcoin slipped below $30,000.
Halliburton Co rose 1.1% after it posted a second-straight quarterly profit, as a rebound in crude prices from pandemic lows buoyed demand for oilfield services.
Peloton Interactive Inc rose 3.6% after the fitness products maker said it would provide UnitedHealth Group’s millions of fully insured members access to its live and on-demand fitness classes for a year at no additional cost.
Advancing issues outnumbered decliners by a 2.26-to-1 ratio on the NYSE and by a 1.67-to-1 ratio on the Nasdaq.
The S&P index recorded eight new 52-week highs and no new low, while the Nasdaq recorded 11 new highs and 38 new lows.
(Reporting by Devik Jain and Shreyashi Sanyal in Bengaluru; Editing by Maju Samuel, Aditya Soni and Uttaresh.V)