Stocks rise ahead of Q3 earnings week
US stocks rose on Monday as investors gathered for a big week of corporate earnings.
S&P 500 (^GSPC) rose 2.7% in the afternoon, and the Dow Jones Industrial Average (^DJI) has gained almost 600 points, which is 1.9%. The high-tech Nasdaq Composite (^IXIC) increased by 3.4%.
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Movements follow a roller coaster week on Wall Street that sent the S&P 500 from its record low to its fifth-biggest intraday swing on Thursday, even as consumer price data showed. inflation continued to race stubbornly across the US economy last month. However, the benchmark index ended the week lower.
Wall Street will turn its attention to how Corporate America is holding up against a backdrop of high prices and the Federal Reserve’s efforts to stabilize them as companies report their third-quarter financials. Bellwethers including Netflix (NFLX), Tesla (TSLA), and IBM (IBM) will announce the results by Friday.
The start of the quarterly earnings season has been weaker than usual, with positive-than-average earnings and revenue surprises from the results so far. Of the roughly 7% of S&P 500 companies that have reported third-quarter data so far, 69% reported earnings per share above estimates, below the five-year average pace of 77%. According to FactSet Research.
Bank of America (UAE) was the penultimate of the country’s six largest banks by assets report earnings Monday morning. Shares rose more than 3% in premarket trading after the company revealed trading revenue that beat Wall Street estimates. However, like its peers, the bank’s profits declined during the period withholding funds for unpaid loan payments If defaults increase, the economy enters a recession.
Central bank drama continued across the Atlantic to start the week. The Bank of England said on Monday morning that it will restart bond sales next week after an emergency rescue intervention this meant a break in sales to stabilize the financial markets. UK Chancellor of the Exchequer Jeremy Hunt also rolled back most of the fiscal package that led to the sale of UK assets, including plans to cut taxes. Sterling jumped 1.4% on the return of the economic agenda.
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Alexandra Semenova is a reporter for Yahoo Finance. Follow him on Twitter @alexandraandnyc
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