NEW YORK: Wall Street’s main stock indexes advanced on Tuesday as upbeat forecasts from Verizon, Coca-Cola and others boosted optimism about corporate America’s health in the face of a slowing economy and higher inflation.
Verizon surged 9.1% after the US wireless carrier raised its annual free cash flow forecast, while General Electric rose 6.9% after the aircraft engine manufacturer lifted its full-year profit forecast.
Coca-Cola advanced 2.7% on raising its annual sales outlook, while industrial goods maker 3M gained 5.2% after lifting its full-year adjusted profit forecast.
Aerospace major RTX jumped 6.1% after it reported better-than-expected quarterly earnings.
“As we’ve seen interest rates persistently rise, there has been this expectation of a dramatic slowdown in the economy which would impact earnings and we’re not seeing it yet,” said Hugh Anderson, managing director at HighTower Advisors.
“The ‘yet’ part is what’s got everybody scratching their heads, you’ve got relatively strong economic numbers coming in for the third quarter and numerous companies in various sectors exceeding analysts expectations.” The yield on benchmark 10-year Treasury notes edged up to 4.86% during the session. It had breached the 5% mark on Tuesday.
An S&P Global survey showed US business output ticked higher in October as the manufacturing sector grew after contracting for five straight months while services activity accelerated modestly amid signs of easing inflationary pressures.
Rate-sensitive megacaps including Tesla, Meta Platforms and Amazon.com rose between 0.2% and 2.1%.
US technology giants are expected to post their strongest quarterly revenue growth in at least a year as their legacy businesses have stabilized, with Microsoft and Alphabet scheduled to report results after markets close on Tuesday.
Of the 118 S&P 500 companies that have reported earnings so far, 81.4% have topped analysts’ expectations, LSEG data showed. Overall, third-quarter earnings are expected to rise 1.7% year-on-year.
The benchmark index has fallen sharply from its July highs on worries the Federal Reserve could keep its monetary policy restrictive for longer than expected against the backdrop of a still-strong economy.
The turmoil in the Middle East is also in focus as Israel intensifies its assault on Hamas in Gaza.
At 11:39 a.m. ET, the Dow Jones Industrial Average was up 196.93 points, or 0.60%, at 33,133.34, the S&P 500 was up 21.71 points, or 0.51%, at 4,238.75, and the Nasdaq Composite was up 73.52 points, or 0.56%, at 13,091.84.
Ten of the 11 major S&P 500 sectors were trading higher, with energy the sole outlier, down 1.0%, on weaker crude prices.
Shares of Coinbase, Riot Platforms and Marathon Digital rose more than 8% each as Bitcoin jumped to a more than one-year high.
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