Wall Street higher on earnings optimism ahead of Trump speech
Reuters
Published Feb 05, 2019 01:21PM ET
Wall Street higher on earnings optimism ahead of Trump speech
By Medha Singh
(Reuters) - Technology and consumer discretionary stocks lifted Wall Street on Tuesday, as upbeat results from Estée Lauder and Ralph Lauren (NYSE:RL) fueled earnings optimism, ahead of the highly awaited State of the Union address by President Donald Trump.
Leading gains on the S&P 500 was cosmetics maker Estée Lauder Cos Inc which jumped 12.21 percent, followed by luxury fashion group Ralph Lauren Corp's 8.98 percent rise, after both their quarterly reports exceeded expectations.
Alphabet (NASDAQ:GOOGL) Inc wrapped up FAANG earnings by posting better-than-expected quarterly revenue and profit. However, worries about sharply higher spending, sent its shares down 0.8 percent.
Google parent's shares were the only FAANG stock in the red. A 1.4 percent rise in Apple Inc (NASDAQ:AAPL) boosted the technology index, while Amazon.com (NASDAQ:AMZN) Inc's rise of 1.2 percent pushed the consumer discretionary sector higher.
"It's been a pretty good earnings season, whether it's top-line or bottom-line numbers — there's still growth. The bar has been lowered and companies are able to step over the hurdle," said Chad Oviatt, director of investment management for Huntington Private Bank in Columbus, Ohio.
"When you look at tech companies you see them forecasting growth and that can be seen from their capital spending plans which came out of the Google's earnings report."
Also helping the market was Boeing (NYSE:BA) Co's 2 percent rise after the planemaker said it made a significant investment in supersonic business jet developer Aerion.
Following a turbulent end to 2018, U.S. stocks have had a stellar run this year with the benchmark S&P 500 and blue-chip Dow Industrials up about 9 percent, and the tech-heavy Nasdaq rising 11 percent.
The rally has been helped by a recent dovish stance from the Federal Reserve, hopes of a trade deal between the United States and China and a largely positive fourth-quarter earnings season.
About 71 percent of the S&P 500 companies, that have reported earnings, have topped estimates. While expectations for fourth-quarter earnings growth are 15.8 percent, estimates for the first-quarter are much lower at 0.4 percent, according to IBES data from Refinitiv.
Trump is set to challenge Democrats to approve funding for his long-sought border wall before the Congress at his State of the Union speech due at 09:00 p.m. ET (0200 GMT Wednesday).
The President has contemplated declaring a national emergency as the Congress wasn't moving toward a deal to fund building a wall along the U.S.-Mexico border, but a source close to Trump said the President was not expected to take that step.
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At 12:51 p.m. ET the Dow Jones Industrial Average was up 113.48 points, or 0.45 percent, at 25,352.85, the S&P 500 was up 4.58 points, or 0.17 percent, at 2,729.45 and the Nasdaq Composite was up 29.79 points, or 0.41 percent, at 7,377.33.
Bank stocks fell and pulled the financials sector down 0.5 percent, weighing the most on the S&P 500 as yields on the 10-year U.S. Treasury bonds slipped.
Advancing issues outnumbered decliners for a 1.35-to-1 ratio on the NYSE and a 1.21-to-1 ratio on the Nasdaq.
The S&P index recorded 12 new 52-week highs and no new lows, while the Nasdaq recorded 48 new highs and 10 new lows.
Written By: Reuters
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