Stocks Open Higher Amid Big Earnings Day
By Will Horner
U.S. stocks gained amid a busy day of earnings reports and ahead
of the inauguration of Joe Biden as the 46th president.
The S&P 500 rose 0.6% in early trading Wednesday, while the
tech-heavy Nasdaq Composite Index gained 1.1%. Dow Jones Industrial
Average added 87 points, or 0.3%.
Investors were parsing earnings from UnitedHealth, Procter &
Gamble, U.S. Bancorp and Morgan Stanley, with United Airlines due
to report results just after markets close.
Shares of Procter & Gamble slipped 0.8% after the
Cincinnati-based consumer goods company said sales jumped in the
fourth quarter. Morgan Stanley gained 2.6% after the release of its
Stocks had begun the week on an upbeat note, with all three
major indexes hovering just below their record highs. Investors
remain optimistic that fiscal stimulus is supporting businesses
through the damage wrought by the Covid-19 pandemic.
That will pressure companies to deliver during this earnings
season and meet the market's expectations, said Brian O'Reilly,
head of market strategy at Mediolanum Investment Funds.
"Any company that is likely to miss or modestly disappoint on
earnings will be punished quite heavily," said Mr. O'Reilly. "A lot
of optimism has already been priced in and typically you don't get
too much room for maneuver when a stock is at a historic high."
As earnings reports pick up, focus is likely to center on
sectors most exposed to the U.S. economy, such as banks and energy
companies, and those which have suffered the most during the
pandemic, such as leisure and hospitality, said Hugh Gimber, a
strategist at J.P. Morgan Asset Management.
"The most interesting thing will be how much leveling-off do we
see, how much are last year's laggards able to catch up," he
Ahead of the opening bell, shares of Netflix rose over 13% after
the streaming company said it had topped 200 million
Chinese internet giant Alibaba jumped 8.5% in Hong Kong after
the company's embattled owner, Jack Ma, made his first public
appearance in three months, ending concerns about his
The inauguration of Joe Biden as president is scheduled to begin
at midday ET amid tight security in the capital. Mr. Biden has laid
out plans for a $1.9 trillion Covid-19 relief package to help
Americans get through the economic shock of the pandemic and direct
money into testing and vaccine distribution.
In commodity markets, Brent crude, the international benchmark
for oil, rose 0.7% to $56.31 a barrel. Gold prices fell 0.2% to
$1,836 a troy ounce.
Overseas, the Stoxx Europe 600 index rose 0.5%. Shares of
Pearson rose nearly 6% after the British education publisher
reported sales growth, in part due to the increase in online
learning during the pandemic.
In Asia, stocks indexes were mixed. The Nikkei 225 ended the day
down 0.4%, while the Shanghai Composite Index rose 0.5%.
In Hong Kong, the Hang Seng Index gained 1.1% to hit a 20-month
high, with stocks buoyed in recent days by hefty inflows from
Write to Will Horner at William.Horner@wsj.com
(END) Dow Jones Newswires
January 20, 2021 09:47 ET (14:47 GMT)
Copyright (c) 2021 Dow Jones & Company, Inc.