Stocks rally after solid earnings, economic data
BNN Bloomberg
The stock market headed toward its best day since July as better-than-estimated corporate earnings and economic data outweighed fears that inflation pressures and supply-chain snarls could crimp growth.
The stock market headed toward its best day since July as better-than-estimated corporate earnings and economic data outweighed fears that inflation pressures and supply-chain snarls could crimp growth.
All major groups in the S&P 500 advanced. Bank of America Corp. rallied after beating analysts’ earnings estimates, with Morgan Stanley, Wells Fargo & Co. and Citigroup Inc. also reporting solid results. Chipmakers climbed on a strong forecast from Taiwan Semiconductor Manufacturing Co., while UnitedHealth Group Inc. led gains in the Dow Jones Industrial Average as the health-care giant raised its outlook for the year.
Applications for U.S. state unemployment benefits fell to the lowest since March 2020, showing employers are hanging onto their workers in a tight labor market. Prices paid to American producers rose at the slowest pace of the year amid cooling costs of services. The PPI has climbed steadily in 2021 as interruptions in supply networks and constraints that include shortages of materials and labor, drive up costs.
“Equity investors have become more cautious over the last couple of months,” said Mark Haefele, chief investment officer at UBS Global Wealth Management. “But we think these concerns will abate in the coming months, and that the third-quarter U.S. earnings season could help investors put supply-chain risks in perspective.”
Chip stocks have felt the wrath of rising bond yields lately, but the sector’s main players may get a boost from investors searching for companies with the ability to pass on higher costs to customers. Bank of America analysts tout market leaders like ASML Holding NV, Soitec, Infineon Technologies AG and ASM International NV as being best placed to withstand inflationary pressures, given a lack of alternative suppliers.
Some other corporate highlights:
