Dow gives up more than half of early gains, now up 200 points
Shares rose again on Tuesday as investors looked to take advantage of Monday’s rally amid a busy week of corporate earnings.
The Dow Jones Industrial Average gained 204 points, or about 0.7%. The S&P 500 and the Nasdaq Composite gained 0.6% and 0.4% respectively.
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.
Tuesday’s strong results helped prolong a rally that began on Monday. Goldman Sachs rose 3% after strong trading results helped the investment bank beat earnings and revenue expectations.
This report continued strong gains in bank earnings, including beats from Bank of America and Bank of New York Mellon on Monday. Lockheed Martin also rose more than 5% after its earnings per share beat estimates.
Elsewhere, Salesforce rose nearly 4% after activist Starboard Value LP disclosed a stake in the software giant, sending the Dow Jones higher. Shares of Colgate-Palmolive gained nearly 2% after Dan Loeb’s Third Point took a stake in the company, CNBC’s David Faber reported.
Wall Street is off to a strong start to the week, with the Nasdaq jumping 3.43% on Monday for its best day since July 27.
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 signal that 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.