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Tech stocks, Netflix power Wall Street's gains; Goldman, J&J drop

Analysts expect profits of S&P 500 companies to rise 18.6 per cent in the first quarter, the biggest increase in seven years

Reuters 

Netflix
Photo: Reuters

 

US stocks rose about 1 per cent on Tuesday, helped by gains in technology companies and as strong earnings from and UnitedHealth boosted optimism over what is expected to be the strongest earnings season in seven years.

shares rose 10 per cent to hit an all-time high after the video-streaming pioneer smashed analysts' quarterly subscriber estimates.

UnitedHealth jumped 3 per cent after the largest US health insurer raised its earnings forecast and posted results that beat estimates.

Analysts expect profits of companies to rise 18.6 per cent in the first quarter, the biggest increase in seven years, according to Thomson Reuters data.

"Being able to surprise on the upside in the phase of higher expectations would be a real sign of strength," said Willie Delwiche, investment strategist at Robert W. Baird in Milwaukee.

Hopes about a strong reporting season have helped divert attention from geopolitical and trade worries, which have roiled the in recent months.

"We've seen enough pessimism build up in investors as people are trying to look for the worst ... things blowing up from a geopolitical perspective. Earnings so far have been good enough to help leave some of the pessimism that's out there," Delwiche said.

At 12:36 a.m. ET the Industrial Average was up 0.88 per cent at 24,789.21. The rose 1 per cent to 2,704.74 and the Nasdaq Composite gained 1.67 per cent to 7,275.82.

At their session highs, all three indexes were above their 50-day moving averages.

Data on Tuesday showed US homebuilding increased more than expected in March amid a rebound in the construction of multi-family housing units. The PHLX housing index rose 1.12 per cent.

Ten of 11 major S&P sectors were higher, led by the technology index's 1.9 per cent gain. The consumer discretionary index rose 1.64 per cent, boosted by and Amazon, which gained 3.2 per cent.

BofA Merrill Lynch's April fund manager survey found the world's biggest were investors' top pick for the third straight month despite mounting worries over regulation.

Facebook, Apple, Amazon, and Alphabet - collectively known as the FAANG group - rose between 1.4 per cent and 9.7 per cent.

Goldman Sachs reversed course to drop 1.7 per cent, mirroring other big US banks, shares of which declined despite beating Wall Street's profit expectations.

J&J fell 1.43 per cent after the healthcare conglomerate raised its sales forecast for the year but kept its outlook for full-year profit unchanged.

Advancing issues outnumbered decliners on the NYSE for a 2.74-to-1 ratio, and on the Nasdaq, for a 2.52-to-1 ratio.

 

(Reporting by Sruthi Shankar in Bengaluru; Editing by Shounak Dasgupta)

First Published: Tue, April 17 2018. 23:22 IST
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