Wall Street rally with earnings in full swing

A Wall Street sign outside the New York Stock Exchange in New York City, New York, USA, October 2, 2020. REUTERS / Carlo Allegri

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  • Boeing travels on agreement to sell jets to 777 Partners
  • Johnson & Johnson and IBM fall on dollar impact warning
  • Hasbro and Halliburton rise after profits
  • Indexes up: S&P 2.5%, Dow 500 2.1%, Nasdaq 2.9%

July 19 (Reuters) – The major US stock indices extended the rise on Tuesday as more companies reported better-than-expected earnings, giving respite to investors worried about higher inflation that would have a negative impact on the company’s bottom line.

The toy company Hasbro Inc (HAS.O) beat the market estimates for quarterly profits, and sent the toy manufacturer’s shares up 0.8%. read more

Shares in Halliburton rose 1.2% after the oil field service provider had a 41% increase in quarterly adjusted earnings. read more

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“Revenue has come in better than expected,” said Paul Kim, CEO of Simplify Asset Management in New York.

“So we do not see the bit of tighter monetary policy and inflation affecting revenues as much as feared.”

Johnson & Johnson shares lost 1.6%, reversing previous gains. The healthcare giant reported profits and sales that exceeded expectations, but reduced the revenue outlook for the year due to a sky-high US currency. read more

A strong dollar also weighed on the shares of IT hardware and services company IBM Corp., which beat quarterly earnings expectations on Monday, but warned that the hit from the exchange rate for the year could be around $ 3.5 billion.

IBM shares fell 6.5%.

The US dollar hovered just above a week’s low on Tuesday, marking its third consecutive day of declines as markets reduced the odds of a full percentage point rise in interest rates in the Federal Reserve this month.

Spiral inflation first led the markets to price in an interest rate increase of 100 basis points at the forthcoming Fed meeting later this month, until some decision-makers signaled an increase of 75 basis points. read more

Apple Inc (AAPL.O) increased the major indices by 2.5%, and recovered almost all the declines from the previous session, when a report said that the company planned to slow growth in employment and expenses next year. read more

Other high-growth stocks such as Tesla Inc (TSLA.O), Microsoft Corp (MSFT.O), Meta Platforms Inc (META.O) and Inc (AMZN.O) also traded higher.

In this earnings season, analysts expect that the overall S&P 500 result from year to year will grow by 5.8%, down from the estimate of 6.8% at the beginning of the quarter, according to Refinitiv data.

At 13:56 ET, the Dow Jones Industrial Average (.DJI) rose 644.72 points, or 2.07%, to 31,717.33, the S&P 500 (.SPX) gained 93.71 points, or 2.45%, to 3,924.56 and Composite Nasdaq. IXIC) added 322.62 points, or 2.84%, to 11,682.67.

All 11 major S&P 500 sector indices rose, with at least eight of them adding more than 2% each.

Boeing Co (BA.N) increased by 4.8% on plans from private equity firm 777 Partners to buy up to 66 more Boeing 737 MAX jets. read more

Netflix Incs (NFLX.O) shares rose 4.6% ahead of results after the market closed.

Progress issues outperformed falling issues on the NYSE by a ratio of 5.43 to 1, while on the Nasdaq favored a ratio of 3.97 to 1 advanced.

The S&P 500 posted a new 52-week high and 30 new lows; Nasdaq Composite recorded 27 new highs and 39 new lows.

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Reporting by Echo Wang in New York; Additional reporting from Shreyashi Sanyal and Aniruddha Ghosh in Bengaluru; Edited by Arun Koyyur, Shounak Dasgupta and Deepa Babington

Our standards: Thomson Reuters Trust Principles.

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