Markets Right Now: Stocks surge to biggest gain since March

Cornelia Mascio
Ottobre 18, 2018

USA stocks rocketed to their biggest gain in six months on Tuesday following strong earnings from major financial and health care companies as well as encouraging reports on the U.S. economy. They're still down for the month following a rout last week.

Goldman Sachs and Morgan Stanley reported better-than-expected quarterly profits, helped by strength in stock trading and equity underwriting, wrapping up a strong quarter for the big US banks. UnitedHealth, the country's biggest health insurer, exceeded analyst's projections for the quarter and raised its projections for the year. Netflix is up 80.5 percent this year, the fourth-best of any S&P 500 stock. The Dow gained 547.87 points, or 2.2 percent, to 25,798.42.

The S&P 500 index jumped 59.13 points, or 2.1 per cent, its largest gain since March 26, and finished at 2809.92.

The technology sector gained 3.0 percent while healthcare rose 2.9 percent. They rose 2.6 per cent to $US3.24 per 1,000 cubic feet and have climbed nearly 8 per cent in October to reach their highest price since January. Silver lost 0.2 percent to $14.70 an ounce. It was up as much as 502 earlier.

Dow members Johnson & Johnson and UnitedHealth Group won 2.0 per cent and 4.6 per cent after reporting earnings.

The technology companies that have led the market higher in recent years, including some of the world's most valuable companies, continued to decline.

Goldman Sachs said net earnings attributable to common shareholders rose to $2.45 billion, or $6.28 per share, in the third quarter ended September 30, up from $2.04 billion, or $5.02 per share in the year-earlier period.

Analysts attributed the turbulence last week - the stock market's worst since March - to worries over rising U.S. interest rates and the fallout from trade wars.

Walmart shares rose 2.1 percent as its chief executive urged investors to revise their view of the company's business.

The S&P 500 index jumped 38 points, or 1.4 per cent, to 2,789. The Nasdaq composite gave up 34 points, or 0.5 percent, to 7,610.

Oil prices edged up in cautious trade on Tuesday as expectations of higher US shale output and inventories vied with worries that crude supply from the Middle East could be disrupted by looming USA sanctions on Iran and growing tensions with top exporter Saudi Arabia.

Investors dumped relatively safe USA government bonds, with yields on the 10- and two-year notes edging higher.

Last week oil prices slumped as global stock markets fell, but a recovery in financial markets, boosted by earnings growth helped provide support to oil prices on Tuesday, traders said.

Banking behemoth Goldman Sachs, which reported results before Tuesday's open, was up 2.2 percent after announcing a 19 percent increase in profits.

IHS Markit trimmed its forecast for the USA holiday shopping season to 4.7 per cent growth from the prior 5.0 per cent projection, citing higher gasoline prices and the drag on discretionary spending following the pullback in the stock market.

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