Yahoo Finance Stock market news live updates: Stocks gain for a second day amid busy earnings lineup
U.S. equities charged forward in another session of outsized swings Tuesday, extending a comeback that kicked off a busy week of big-name third-quarter earnings reports.
[Click here to read what's moving markets on Wednesday, Oct. 19]
The S&P 500 (^GSPC) advanced 1.2%, though after paring gains from a sharper move higher earlier in the session, while the Dow Jones Industrial Average (^DJI) added around 340 points, or 1.1%. The technology-heavy Nasdaq Composite (^IXIC) closed up 0.9%.
Sentiment got a boost Tuesday on third-quarter results from Goldman Sachs (GS) — Wall Street's premier investment bank — which posted earnings that beat analyst estimates across the board despite challenging year-over-year comparisons. Shares closed roughly 2% higher.
In an interview with CNBC, CEO David Solomon warned that there was a "good chance" the U.S. economy may enter a recession next year.
“That environment heading into 2023 is one that you’ve got to be cautious and prepared for,” he said.
Goldman Sachs is the last of the country’s six megabanks to unveil results. Despite better-than-feared figures from some names in financials that gave stocks a boost Monday, the banking industry has reported a year-over-year earnings decline of 13% for the third-quarter, driven primarily by increased provisions for loan losses to prepare for a possible recession, according to FactSet Research. Wall Street's big banks are bellwethers of the U.S. economy and typically set the tone for the earnings season.
Elsewhere on the corporate front, shares of Carnival (CCL) bounced nearly 11% after Carnival Holdings, a subsidiary of the cruise operator, announced it will offer $1.25 billion of senior priority notes due 2028 and use proceeds to cover debt and other expenses.
Shares of Colgate-Palmolive Company (CL) were slightly higher, up closing up 1% after a report from CNBC that Daniel Loeb's Third Point has amassed a substantial stake in the company and sees value in a potential spinoff of its Hill's Pet Nutrition business and other brands.
Salesforce (CRM) shares also climbed more than 4% after activist investor Jeffrey Smith said his investment firm Starboard Value has engaged with the company's management on possible ways to bolster its valuation.
The moves on Tuesday cap a second straight positive day on Wall Street after all three major averages rallied in the previous session, with the S&P 500, Dow, and Nasdaq notching gains of 2.7%, 1.9%, and 3.4%, respectively.
“As we continue to remind you, this kind of outsized move is not on its own historically indicative of either a healthy market or an investable low,” DataTrek Research Co-Founder Jessica Rabe said in a note.
The number of days in which the S&P 500 gained more than 1% was 54 last year. Monday’s bounce brings the year-to-date tally of such gains to 100 – an important threshold the benchmark index has only reached seven other years in the past six decades: during the Saudi oil embargo, the 2000 Dotcom Bubble, the 2008 Global Financial Crisis, and 2020’s pandemic crash.
With inflows to stocks near a record last week, investors have been ramping up bets that a market bottom is in. But many Wall Street strategists have argued that the optimism is premature, particularly as what’s expected to be a murky earnings season gets underway.
Bank of America’s global fund manager survey out Tuesday morning found that 91% of respondents said corporate earnings are unlikely to rise 10% or more in the next year, the highest share of investors in the survey’s history – a sign of further downside for forward earnings-per-share estimates for the S&P 500 index.
As such, BofA analysts deemed any indication that the end of the equity rout is near merely “tasty morsels for another bear rally,” adding that the institution projects a "big low" and subsequent "big rally" in the first half of 2023, when the Federal Reserve is expected to change course and start cutting rates.
This month's survey “screams macro capitulation, investor capitulation, start of policy capitulation,” strategists led by Michael Hartnett wrote.
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Alexandra Semenova is a reporter for Yahoo Finance. Follow her on Twitter @alexandraandnyc
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