Stocks rose for a second straight session on Tuesday as strong corporate earnings reports helped extend a rally to start the week.
The Dow Jones Industrial Average gained 337.98 points, or 1.12%, to close at 30,523.80. The S&P 500 climbed 1.14% to 3,719.98. The Nasdaq Composite added 0.90%, finishing at 10,772.40. Those gains built on a bigger upside move from Monday, which saw the Nasdaq rise more than 3% for its best day since July.
CNBC
Goldman Sachs rose 2.3% to boost the Dow after strong trading results helped the investment bank beat quarterly earnings and revenue expectations. That report continued a strong stretch of bank earnings, including beats from Bank of America and Bank of New York Mellon on Monday, and the financial sector as a whole outperformed on Tuesday.
Lockheed Martin also rose 8.7% after its earnings per share topped estimates.
Fears of a recession and overly aggressive central banks have helped push the U.S. markets to their lows of the year in recent weeks, but the solid start to earnings season may signal that the economy is currently in better shape than feared.
“3Q and 4Q earnings should confirm fundamentals remain anchored in resilient labor market and Covid reopening. Equity valuation will likely remain tied to global central bank rhetoric and rates, which is turning incrementally less negative. As such, we see equities primed for upside into year-end on resilient 2H22 earnings, low equity positioning, very negative sentiment and given more reasonable valuation,” Dubravko Lakos-Bujas, JPMorgan’s head of global macro research, said in a note to clients.
“Next year, however, we expect a more challenging earnings backdrop relative to current expectations,” he added.
Trading was choppy on Tuesday, as many investors seem to lack confidence in the rally. The averages hit their highest level in early trading, with the Dow gaining more than 600 points, but lost ground as U.S. Treasury yields moved up. The Nasdaq briefly turned negative at two different points during the session.
Elsewhere, Salesforce rose 4.3% after activist Starboard Value LP revealed a stake in the software giant, making the stock the top performer in the Dow.
