Solid earnings lift mood on Wall Street ahead of Apple, Amazon results
(For a Reuters live blog on U.S., UK and European stock markets, click
or type LIVE/ in a news window)
* U.S. economy grew at slowest pace in more than a year in Q3
* Caterpillar, Merck rise after posting higher profits
* Indexes up: Dow 0.47%, S&P 0.60%, Nasdaq 0.71%
By Devik Jain and Shashank Nayar
Oct 28 (Reuters) - Wall Street's main indexes rose on Thursday as upbeat quarterly earnings from Caterpillar, Merck and Ford helped investors shrug off data that showed U.S. economic growth slowed sharply in the third quarter.
Ford Motor Co F.N jumped 11.2% after the carmaker topped third-quarter profit estimates and raised its full-year earnings forecast.
Caterpillar Inc CAT.N added 2.9% after reporting a quarterly profit on high commodity prices, while a quarterly beat and a forecast raise by drugmaker Merck & Co Inc MRK.N helped its shares gain 4.0%.
Ten of the 11 major S&P sectors advanced in early trading, with technology .SPLRCT and real estate .SPLRCR among the top gainers.
The Commerce Department's report showed the U.S. economy grew at a 2% annualized rate last quarter, as COVID-19 infections flared up, upending global supply chains and fueling labor and goods shortages.
Labor market conditions in the United States continued to improve, with the number of Americans filing new claims for unemployment benefits dropping to a fresh 19-month low last week.
"Slower growth in Q3 was the result of a normalization of spending activity and the significant bottlenecks that remained. There are signs of a better development in the fourth quarter," Bernd Weidensteiner, senior economist at Commerzbank said in a note.
"(The data) will not dissuade the Fed from deciding on a gradual end to its bond purchases next week, given the good situation on the labor market and increasing price risks."
Stellar earnings reports have driven the benchmark S&P 500 .SPX index and the Dow Jones Industrial Average .DJI to record highs this week, while bringing the tech-heavy Nasdaq .IXIC to just 0.4% below its all-time peak hit on Sept. 7.
Profits for S&P 500 companies are expected to grow 37.6% year-on-year in the third quarter, up from an expected 29.4% rise at the start of the earnings season, according to data from Refinitiv.
Focus will also be on earnings reports from Apple Inc AAPL.O and e-commerce giant Amazon.com AMZN.O after market close on Thursday, wrapping up a largely upbeat reporting season for mega-cap technology stocks.
Shares of Apple rose 2.1% to provide the biggest boost to the S&P 500 and the Nasdaq, followed by gains in Tesla Inc TSLA.O .
At 10:06 a.m. ET, the Dow Jones Industrial Average .DJI was up 165.72 points, or 0.47%, at 35,656.41, the S&P 500 .SPX was up 27.49 points, or 0.60%, at 4,579.17, and the Nasdaq Composite .IXIC was up 108.00 points, or 0.71%, at 15,343.83.
In the run-up to the Federal Reserve's policy meeting next week, market focus has also moved beyond pricing the likely taper of asset purchases this year and onto the timing of an interest rate hike next year.
Also on the radar, U.S. President Joe Biden will urge Democrats in Congress to back a new $1.75 trillion framework for economic and climate change spending.
EBay Inc EBAY.O fell 7.9% after the e-commerce firm forecast downbeat holiday-quarter revenue.
Advancing issues outnumbered decliners by a 2.26-to-1 ratio on the NYSE and by a 2.40-to-1 ratio on the Nasdaq.
The S&P index recorded 22 new 52-week highs and two new lows, while the Nasdaq recorded 54 new highs and 60 new lows.
Reporting by Devik Jain and Shashank Nayar in Bengaluru; Editing by Shounak Dasgupta and Maju Samuel
Disclaimer: The XM Group entities provide execution-only service and access to our Online Trading Facility, permitting a person to view and/or use the content available on or via the website, is not intended to change or expand on this, nor does it change or expand on this. Such access and use are always subject to: (i) Terms and Conditions; (ii) Risk Warnings; and (iii) Full Disclaimer. Such content is therefore provided as no more than general information. Particularly, please be aware that the contents of our Online Trading Facility are neither a solicitation, nor an offer to enter any transactions on the financial markets. Trading on any financial market involves a significant level of risk to your capital.
All material published on our Online Trading Facility is intended for educational/informational purposes only, and does not contain – nor should it be considered as containing – financial, investment tax or trading advice and recommendations; or a record of our trading prices; or an offer of, or solicitation for, a transaction in any financial instruments; or unsolicited financial promotions to you.
Any third-party content, as well as content prepared by XM, such as: opinions, news, research, analyses, prices and other information or links to third-party sites contained on this website are provided on an “as-is” basis, as general market commentary, and do not constitute investment advice. To the extent that any content is construed as investment research, you must note and accept that the content was not intended to and has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such, it would be considered as marketing communication under the relevant laws and regulations. Please ensure that you have read and understood our Notification on Non-Independent Investment. Research and Risk Warning concerning the foregoing information, which can be accessed here.