US stock indices rose higher in choppy trade on Monday as gains in Tesla and PayPal shares led investors gearing up for earnings reports from heavyweight technology companies this week that could provide direction to the markets.
Tesla Inc rose 4.5% to a record high after car rental firm Hertz placed orders for 100,000 Tesla cars, while Morgan Stanley raised its price target on the electric-car maker’s stock.
Its shares gave the biggest boost to the S&P 500 and Nasdaq, followed by PayPal Inc., which added 4.9% after the payments company scrapped its plan to buy digital pinboard site Pinterest Inc. for $45 billion. Shares of Pinterest fell 13.6%.
Five of the 11 major S&P sectors advanced in early trading. Energy shares outperformed, gaining 1.9%.
Facebook Inc., which will bring quarterly results for the mega-cap technology giant after the market close on Monday, fell 0.3%. Investors fear that its advertising revenue may bear the brunt of Apple’s iPhone privacy changes, which also affected Snap Inc.’s third-quarter revenue.
“Following Snap’s neck, if the social network says so, markets will have an itchy trigger finger on the sell button,” said Jeffrey Haley, senior market analyst for Asia Pacific at OANDA.
Coupled with Facebook, shares of Microsoft, Apple, Alphabet and Amazon.com Inc., which collectively weigh more than 22% in the S&P 500, also slipped, reducing gains on the S&P 500 and Nasdaq.
Strong earnings updates from some companies on Friday propelled the benchmark index to an intra-day record high, having gained 5.6% so far in October after stumbling in September.
Analysts expect S&P 500 earnings to grow 34.8% year-on-year for the third quarter, according to data from Refinitiv.
“We continue to see strong confidence with the increase in quarterly earnings estimates,” said Sam Stovall, chief investment strategist at CFRA Research.
“Markets have recovered their old highs and old highs are like rusty doors that require multiple attempts to open, so it may take more sideways trading days before the markets take off again. Huh.”
Investors are also assessing how companies are easing supply chain constraints, labor shortages and inflationary pressures to sustain growth.
Shares of Kimberley-Clark fell 3.3% after the Huggies diaper maker cut its 2021 profit outlook due to high input cost inflation.
At 10:09 am, the Dow Jones Industrial Average was up 29.88 points, or 0.08%, at 35,706.90, the S&P 500 was up 5.33 points, or 0.12%, at 4,550.23, and the Nasdaq Composite was up 45.24 points, or 0.30. %, at 15,135.44.
On the economic data front, readings on US third quarter GDP – the Federal Reserve’s preferred inflation gauge, core PCE price index and consumer confidence data – will be released later this week.
Carnival Corp. slipped 1.3% after Citigroup downgraded the cruise operator’s stock from “buy” to “neutral.”
Advancing issues declined from a 1.56-to-1 ratio on the NYSE and 1.40-to-1 on the Nasdaq.
The S&P index recorded 50 new 52-week highs and a new low, while the Nasdaq recorded 95 new highs and 45 new lows.
This story has been published without modification in text from a wire agency feed. Only the title has been changed.
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