Stocks rose for a second straight session on Tuesday as strong corporate earnings reports helped extend a rally to start the week.
The Dow Jones Industrial Average gained 337 points, or about 1.1%. The S&P 500 and the Nasdaq Composite gained 1.1% and 0.9% respectively. Those gains were backed by a bigger bullish move from Monday, which saw the Nasdaq rise more than 3% for its best day since July.
Goldman Sachs rose more than 2% to boost the Dow after strong trading results helped the investment bank beat profit and revenue expectations. That report continued strong gains in bank earnings, including beats from Bank of America and Bank of New York Mellon on Monday, and the financial sector as a whole outperformed on Tuesday.
Lockheed Martin also rose more than 8% after its earnings per share beat estimates.
Fears of a recession and overly aggressive central banks have helped push U.S. markets to yearly lows in recent weeks, but the strong start to the earnings season could indicate the economy is currently in better shape. provided that.
“The 3rd and 4th quarter results should confirm that the fundamentals remain anchored in a resilient labor market and the reopening of Covid. Equity valuation is likely to remain tied to global central bank rhetoric and rates, which are becoming less and less negative. As such, we see equities bracing for the upside in the year-end on resilient 2H22 earnings, low equity positioning, very negative sentiment and a more reasonable valuation.” said Dubravko Lakos-Bujas, head of global macro research at JPMorgan, in a note to clients.
“Next year, however, we expect a more challenging earnings environment compared to current expectations,” he added.
Trading was choppy on Tuesday as many investors appeared to lack confidence in the rally.
Averages were higher in early trading, with the Dow Jones gaining more than 600 points, but moved above their highs as US Treasury yields rose. The Nasdaq briefly turned negative for the session before the market rebounded from its lows, and it dipped into the red again in the afternoon on a report from The Information that Apple was cutting iPhone production. .
Elsewhere, Salesforce rose more than 4% after activist Starboard Value LP disclosed a stake in the software giant, making the Dow Jones’ best-performing stock.
After the bell, Netflix and United Airlines will release their latest results.