Upbeat earnings results led the benchmarks to close in the green on Tuesday. Better-than-expected earnings results from UnitedHealth, Netflix, Goldman Sachs and Johnson & Johnson had a positive impact on investor sentiment. Gains in UnitedHealth boosted the healthcare sector. Meanwhile, pick-up in inflation raised December rate hike chances.
For a look at the issues currently facing the markets, make sure to read today’s Ahead of Wall Street article.
The Dow Jones Industrial Average (DJI) increased 0.4%, to close at 18,161.94. The S&P 500 rose 0.6% to close at 2,139.60. The tech-laden Nasdaq Composite Index closed at 5,243.84, gaining 0.9%. The fear-gauge CBOE Volatility Index (VIX) decreased 5.7% to settle at 15.28. A total of around 5.6 billion shares were traded on Tuesday, lower than the last 20-session average of 6.52 billion shares. Advancers outpaced declining stocks on the NYSE. For 74% stocks that advanced, 23% declined.
Encouraging Earnings Results Moved Benchmarks Up
Shares of UnitedHealth Group Incorporated (UNH - Analyst Report) rose 6.9%, registering its best trading day since April 2011 after reporting third-quarter earnings per share (EPS) and revenues, which beat the Zacks Consensus Estimates. The company also increased its 2016 earnings guidance. (Read More: UnitedHealth Beats on Earnings in Q3, Guides Higher )
Gains in UnitedHealth led the Health Care Select Sector SPDR (XLV) to rise 1.2%, which emerged as the best performer among the S&P 500 sectors. Some of its holdings including Pfizer Inc. (PFE - Analyst Report) and Merck & Co., Inc. ( (MRK - Analyst Report) rose 0.6% and 0.9%, respectively. Pfizer have a Zacks Rank #3 (Hold) and Merck possess a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here .
Also, Netflix, Inc’s (NFLX - Analyst Report) shares jumped 19%, its best percentage increase since July, 2015 after posting third quarter EPS and revenues that outpaced the Zacks Consensus Estimates. The company also posted strong subscriber growth. (Read More: Netflix Gains on Solid Q3 Earnings, Subscriber Growth )
Additionally, shares of Goldman Sachs Group, Inc. (GS - Analyst Report) advanced 2.2% after its third quarter EPS and revenues surpassed the Zacks Consensus Estimates. Surge in trading revenues boosted the company’s earnings for the quarter. (Read More: Goldman Q3 Earnings Soar as Trading Revenues Surge )
Further, Johnson & Johnson (JNJ - Analyst Report) reported another strong quarter with both earnings and sales beating expectations. Moreover, the company raised the lower end of its earnings outlook for the year. (Read More: J&J Outshines in Q3 Earnings on Strong Pharma Sales )
However, shares of Johnson & Johnson fell 2.6% after competitor Pfizer announced that it will soon launch a cheaper copy of Johnson & Johnson’s arthritis drug, Remicade.
Economic Data on Focus
In economic news, the Labor Department reported that Consumer Price Index (CPI) rose 0.3% in September, its highest increase in last five months. It was in line with consensus estimate of 0.3% gain. Moreover, CPI rose 1.4% over the past twelve months, its best gain since late 2014. However, Core-CPI gained only 0.1%, lower than the consensus estimate of 0.2% rise and previous month’s increase of 0.3%.
Stocks That Made Headlines
Regions Financial Q3 Earnings Beat; Fee Income Rises
Significantly lower provisions and higher fee revenues drove Regions Financial Corporation’s ( (RF - Analyst Report) third-quarter 2016 earnings from continuing operations, which surpassed the Zacks Consensus Estimate. (Read More)
BlackRock Q3 Earnings Top Estimates on Lower Costs
BlackRock, Inc. (BLK - Analyst Report) reported third-quarter 2016 adjusted earnings, which handedly surpassed the Zacks Consensus Estimate. (Read More)
MGIC Investment Beats on Q3 Earnings & Revenues
MGIC Investment Corp . (MTG - Analyst Report) reported third-quarter 2016 operating net income, which outpaced the Zacks Consensus Estimate and surged 25% year over year. (Read More)
Domino's Q3 Earnings & Revenues Beat, Shares Up
Domino's Pizza Inc. (DPZ - Analyst Report) posted robust third-quarter 2016 results, wherein both earnings and revenues beat the respective Zacks Consensus Estimate. (Read More)
SM Energy Snaps Up Additional Permian Acreage for $1.6B
SM Energy Company (SM - Analyst Report) recently announced its decision to acquire almost 35,700 net acres in the Midland Basin of West Texas for a consideration of $1.6 billion. ( Read More)
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