Wall Street advances on upbeat earnings, Brexit deal

This post was originally published on this site

© Reuters. Traders work on the floor at the NYSE in New York© Reuters. Traders work on the floor at the NYSE in New York

By Shreyashi Sanyal

(Reuters) – Wall Street rose on Thursday, with the S&P 500 and Nasdaq indexes near one-month highs on upbeat earnings from Netflix and Morgan Stanley , while investors cheered Britain’s preliminary last-minute deal with the European Union.

British Prime Minister Boris Johnson said “we have a great new Brexit deal”, lifting the mood in global markets, but he still faces a tough vote in parliament on Saturday.

“It seems as if the Brexit deal is being viewed as a modest positive by investors but along with the tentative U.S.-China trade deal, the devil is in the details,” said Michael Geraghty, equity strategist at Cornerstone Capital Group in New York.

“From where we are right now investors are viewing the glass as half full.”

Netflix Inc (O:) shares rose 4.4%, after the video streaming service provider added slightly more paying subscribers than Wall Street’s expectations in the third quarter.

The stock helped the communication services sector () gain 0.7%.

Morgan Stanley (N:) climbed 3% after the bank beat analysts’ expectations for quarterly profit, wrapping up strong earnings from major U.S. lenders including JPMorgan Chase & Co (N:), Citigroup Inc (N:) and Bank of America (N:).

“So far so good. Definitely the bank earnings have been terrific, relative to expectations,” said Paul Nolte, portfolio manager at Kingsview Asset Management in Chicago.

Supporting sentiment was White House economic adviser Larry Kudlow’s comments that he sees momentum to finalize the initial phase of a U.S.-China trade deal outlined last week, adding it may be signed at the APEC forum next month.

Rising uncertainties around the trade war, increasing geopolitical risks and weak domestic economic indicators have been a concern for investors.

In the latest sign, data showed U.S. homebuilding tumbled from a more than a 12-year high in September, while another report showed a deceleration in factory activity in the mid-Atlantic region in October.

The third-quarter earnings season is expected to see its first year-on-year contraction since 2016, with analysts estimating a 2.9% drop in S&P 500 earnings.

Of the 63 S&P 500 companies to have posted quarterly results so far, 82.5% have beaten estimates.

At 11:20 a.m. ET, the S&P 500 () was up 10.89 points, or 0.36%, at 3,000.58 and the Nasdaq Composite () was up 28.65 points, or 0.35%, at 8,152.84.

The Dow Jones Industrial Average () was up 39.83 points, or 0.15%, at 27,041.81

Limiting gains on the blue-chip index was a 6% slide in shares of International Business Machines Corp (N:) after the company missed quarterly revenue estimates.

The Dow Jones Transports index (), which is closely watched by investors to gauge the health of the economy, was up 0.8%.

CSX Corp (O:) shares rose 2.5% after the railroad operator beat quarterly profit expectations.

Union Pacific Corp (N:) missed earnings estimates but shares of the company reversed earlier losses to trade 0.9% higher.

Advancing issues outnumbered decliners by a 2.31-to-1 ratio on the NYSE and by a 2.02-to-1 ratio on the Nasdaq.

The S&P index recorded 33 new 52-week highs and two new lows, while the Nasdaq recorded 43 new highs and 37 new lows.

Add Comment