US stock indexes rose on Wednesday after encouraging results from several companies that partially started off the fourth quarter reporting season, while Big Tech stocks also bounced back after a strong sell-off.
Quarterly reports from UnitedHealth Group Inc and Procter & Gamble Co supported sentiment in early trade, while Bank of America Corp and Morgan Stanley wrapped up earnings from large lenders on a positive note.
“Shares were taking losses last quarter, even though they beat estimates, which tells me their prices had gone up,” said Joe Saluzzi, co-manager of trading at Themis Trading in New Jersey.
“Now that we’ve seen some selloff, when a company reports better-than-expected earnings, they should be getting a price increase, unlike the previous quarter.”
All 11 major S&P 500 sector indexes were higher, with battered technology stocks rising 0.9%.
UnitedHealth rose 2.5% after the health insurer beat market estimates for quarterly profit on strong demand in the health insurance business.
Procter & Gamble gained 3.8% as it raised its annual sales forecast, benefiting from resurgent demand for cleaning products due to a spike in COVID-19 infections.
Bank of America added 2.5% on reporting a jump in fourth-quarter profit, while Morgan Stanley added 2.7% after posting quarterly earnings above market expectations.
Most other large banks, including JPMorgan Chase & Company, Citigroup and Goldman Sachs Group Inc., reported disappointing results, plunging the S&P 500 financial sector and sub-sector of banks below record highs.
According to Refinitiv’s IBES estimate, earnings for S&P 500 companies are expected to grow 23.1% year-over-year in the fourth quarter.
The Nasdaq index came a hair’s breadth away from confirming a 10% correction when it closed Tuesday, down 9.7% from its record high on Nov.
The tech-heavy index also closed below its 200-day moving average, a key technical support level, for the first time in nearly two years, as a jump in the benchmark US Treasury yield put pressure on the tech-heavy index.
Megacap growth companies including Microsoft Corp., Alphabet Inc., Tesla Inc., Meta Platforms Inc. and Netflix Inc. rose up to 2%.
Investors now await next week’s Federal Reserve policy meeting for more hints on the central bank’s plan to control inflation. Last week’s data showed US consumer prices rose strongly in December, the biggest annual increase in inflation in nearly four decades.
At 9:42 am, the Dow Jones Industrial Average was up 138.44 points, or 0.39%, at 35,506.91, the S&P 500 was up 27.93 points, or 0.61%, at 4,605.04 and the Nasdaq Composite was up 101.78 points, or 0.70%. , at 14,608.68.
Cisco Systems Inc. fell 1.6% after Goldman Sachs downgraded the network equipment maker’s stock from “buy” to “neutral.”
United Airlines fell 0.6% ahead of its fourth-quarter results after the market closed.
Advancing issues followed by a 2.39-to-1 ratio on the NYSE and a 2.04-to-1 ratio on the Nasdaq.
The S&P index recorded four new 52-week highs and two new lows, while the Nasdaq recorded 16 new highs and 140 new lows.
This story has been published without modification in text from a wire agency feed.
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