Wall Street’s major indices have regained their footing and have recovered from a brief shock following the resignation of Liz Truss as UK Prime Minister, as attention returned to positive forecasts from IBM and AT&T.
IBM Corp shares gained 4.1 percent on Thursday, leading the advance of Dow components after the software and IT services company beat quarterly earnings estimates on Wednesday and said it expects to beat its revenue growth targets for the full year.
Fellow blue-chip stock Verizon Communications Inc rose 2.3 percent after peer AT&T Inc jumped 9.9 percent in raising its annual earnings forecast.
Both companies rose 1.9 percent on the S&P 500 communications services sector index to gain gains in the 11 key sectors on the benchmark.
This comes after positive results from major US banks, Netflix Inc, Procter & Gamble Co and Travelers Companies Inc, prompted analysts to raise third-quarter earnings growth expectations for S&P 500 companies to 3.1 percent, up from an increase of 2.8 percent earlier this week. according to Refinitiv data.
However, the estimate is still well below the 11.1 percent increase forecast at the beginning of July.
“With the small number of companies reporting earnings to date, we see the majority of them exceed earnings estimates and I’d love to put that in the ‘better than feared’ category,” said Art Hogan, chief market strategist at B Riley Wealth. in New York City.
Tesla Inc fell 6.6 percent as the electric vehicle maker signaled continued logistical challenges, with fourth-quarter deliveries growing less than its target of 50 percent.
Wall Street’s major indices have suffered from fears of aggressive rate hikes by the Federal Reserve in recent months, with Treasury yields soaring to multi-year highs while there are no real signs of US inflation slowing.
Data showed that the number of Americans filing new jobless claims fell unexpectedly last week, pointing to a tight labor market as demand for labor cools on higher interest rates.
The US central bank is expected to make its fourth consecutive 75 basis point increase at its November meeting, with some even pricing in a full percentage point increase.
US equities came under pressure for a short time after Britain’s Liz Truss announced her resignation just six weeks after her appointment, toppled by an economic program that had sent shockwaves through global financial markets and divided her conservative party.
In early trading Thursday, the Dow Jones Industrial Average rose 299.33 points, or 0.98 percent, to 30,723.14, the S&P 500 rose 26.44 points, or 0.72 percent, to 3,721.60, and the Nasdaq Composite rose. by 102.57 points or 0.96 percent, at 10,783.08.
The number of emerging issues surpassed declines by a 2.38-to-1 ratio on the NYSE and a 2.09-to-1 ratio on the Nasdaq.
The S&P index recorded two new 52-week highs and 10 new lows, while the Nasdaq recorded 17 new highs and 104 new lows.