U.S. Stocks Climb to Start a Busy Week of Earnings
October 21 2019 - 4:02PM
Dow Jones News
By Karen Langley and Caitlin Ostroff
U.S. stocks inched higher Monday to start a busy week of
corporate earnings, while investors continued to track developments
in the U.K.'s divorce from the European Union.
The S&P 500 ticked up 0.7%, while the Nasdaq Composite
gained 0.9%. The Dow Jones Industrial Average edged up 0.2%,
weighed down by a decline in the shares of Boeing after the Wall
Street Journal reported that Congress was intensifying scrutiny of
the plane maker.
This is the busiest week of the quarter for corporate earnings,
and results so far have beaten analysts' expectations. Those
expectations were low, however, with analysts as of Sept. 30
estimating a 4% decline in third-quarter earnings for S&P 500
companies, according to FactSet.
Shares of oil-field services company Halliburton added 5.5%
Monday after reporting cost cuts and a better-than-expected
outlook. Even with the rally, the stock is down 27%
year-to-date.
"So far we've seen the out-of-favor stocks react positively to
earnings, " said Olivier Sarfati, head of equities at GenTrust.
"But we haven't seen the in-favor stocks that everybody else owns
because they haven't reported yet."
Among the companies scheduled to report later this week are
Microsoft, Amazon and Twitter.
Investors are also looking ahead to the Federal Reserve's
meeting later this month, when the central bank is expected to
lower interest rates again, after two recent rate cuts.
Sentiment has risen in recent days after news including the
"phase one" trade deal between the U.S. and China that prevented
additional tariffs from taking effect. Trade officials from the two
countries were to continue discussing a partial deal that could be
signed by President Trump and Chinese President Xi Jinping.
"The pieces are falling into place for an upturn in global
growth," said Joe Quinlan, head of CIO Market Strategy for Merrill
and Bank of America Private Bank. "This is exactly what equities
are suggesting."
In other corporate news, Boeing shares fell 4.2% -- weighing on
the Dow -- after The Wall Street Journal reported that Congress is
ramping up scrutiny of the plane maker's leaders as new details
pointed to undue management pressure on employees.
Shares of drug companies AmerisourceBergen, Cardinal Health and
McKesson fell, after the Journal reported the companies reached a
last-minute settlement, avoiding a trial seeking to blame them for
fueling the opioid crisis. AmerisourceBergen fell 2.8%, Cardinal
Health dropped 2.0% and McKesson lost 2.3%.
Cosmetics maker Coty shares rallied 14% after the company said
it would explore strategic alternatives for its professional beauty
business.
The yield on the 10-year U.S. Treasury rose to 1.794% from
1.747% Friday. Bond yields rise as prices fall.
After a critical vote on Prime Minister Boris Johnson's Brexit
deal was delayed, the U.K.'s FTSE 100 edged up 0.2%. The
pan-continental Stoxx Europe 600 index rose 0.6%.
Write to Caitlin Ostroff at caitlin.ostroff@wsj.com
(END) Dow Jones Newswires
October 21, 2019 15:47 ET (19:47 GMT)
Copyright (c) 2019 Dow Jones & Company, Inc.
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