- US services sector unexpectedly picks up in July
- PayPal rises after raising earnings prospects
- Moderna Jumps On A $3 Billion Stock Repurchase Plan
- Indices: S&P 500 +1.58%, Nasdaq +2.53%, Dow +1.31%
Aug 3 (Reuters) – Wall Street rallied on Wednesday, with strong earnings forecasts from PayPal and CVS Health Corp boosting sentiment and helping push the Nasdaq to its highest level since early May.
Data showed that the US services industry rebounded unexpectedly in July on strong order growth, while supply constraints and pricing pressure eased. This supported the view that the economy is not in recession, despite the slump in production in the first half of the year. Continue reading
A fresh set of strong results from the likes of PayPal (PYPL.O) and CVS Health Corp boosted sentiment in a broadly upbeat quarterly earnings season. It has helped markets recover from losses caused by worries about decades of inflation, rising interest rates and contracting economic output.
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“We’re rolling through the second quarter gains and broadly speaking, from the tech complex to consumer discretionary and industrials, we’re seeing many better than feared numbers and that’s just about good enough,” said Sahak Manuelian, managing director of trading at Wedbush Securities in Los Angeles.
Apple (AAPL.O) and Amazon (AMZN.O) are each up more than 3%, while Facebook owner Meta Platforms (META.O) is up nearly 5%.
PayPal Holdings rose 9.5% after raising its annual earnings guidance and saying activist investor Elliott Management has a stake of over $2 billion in the financial technology company. Continue reading
CVS Health Corp rose 5.4% as the largest US pharmacy chain raised its full-year profit guidance after releasing strong quarterly results. Continue reading
Manuelian said another factor behind Wednesday’s rally in equities is growing investor confidence that the Fed has already implemented the bulk of the rate hikes that will be needed to bring inflation under control.
Meanwhile, Richmond Federal Reserve Chairman Thomas Barkin joined policymakers on Wednesday in saying that the Federal Reserve is committed to bringing inflation under control and bringing it back to its 2% target. Continue reading
In afternoon trade, the S&P 500 was up 1.58% to 4,155.65 points.
The Nasdaq rose 2.53% to 12,661.05 points, while the Dow Jones Industrial Average rose 1.31% to 32,819.72 points.
Additional data on Wednesday showed that new orders for US-made goods rose solidly in June and business spending on equipment was stronger than originally thought, indicating underlying strength in manufacturing despite rising interest rates. Continue reading
Of the S&P 500’s 11 sector indices, 10 led by Information Technology (.SPLRCT) rose 2.63%, followed by a 2.59% gain in Consumer Discretionary (.SPLRCD).
The S&P 500 has rebounded about 13% from its closing low in mid-June and would need to rise another 15% to revisit its record high in early January.
Moderna Inc (MRNA.O) surged over 16% after the vaccine maker announced a $3 billion stock buyback plan. Continue reading
Regeneron Pharmaceuticals rose 6.1% after beating quarterly sales estimates, while coffee chain Starbucks Corp (SBUX.O) rose 4.4% after reporting upbeat quarterly earnings. Continue reading
In the S&P 500 (.AD.SPX), there were four to one more issues going up than down. The S&P 500 posted two new highs and 30 new lows; The Nasdaq recorded 42 new highs and 31 new lows.
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Reporting by Aniruddha Ghosh and Devik Jain in Bengaluru and by Noel Randewich in Oakland, California; Edited by Sriraj Kalluvila, Arun Koyyur and Cynthia Osterman
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