Dow Surges 450 Points As Wall Street Extends Its Winning Streak To A Second Day On The Back Of Strong Results

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Last Updated on October 18, 2022 by Bitfinsider

As investors attempted to build on Monday’s surge ahead of a busy week of corporate earnings reports, the stock market experienced a significant increase on Tuesday.

The Dow Jones Industrial Average rose by 453 points, which corresponds to a gain of around 1.5%. The S&P 500 index and the Nasdaq composite index both saw increases of 1.5% and 1.6%, respectively.

The release of positive earnings figures on Tuesday provided additional fire for a surge that had begun the previous Monday. The stock price of Goldman Sachs increased by more than 4% after the investment bank reported earnings and revenue that exceeded analysts’ forecasts thanks to solid trading outcomes.

This report contributed to the continuation of a good string of earnings from banks, which included outperformance from Bank of America and Bank of New York Mellon on Monday. Lockheed Martin’s share price also increased by close to 3% after the company reported earnings per share that were higher than expected.

Aside from that, shares of Salesforce climbed by 6% after activist fund Starboard Value LP disclosed a stake in the software giant, which contributed to a rise in the Dow. According to a report by David Faber of CNBC, the value of a share of Colgate-Palmolive increased by about 3 percent when Dan Loeb’s Third Point invested in the company.

The Dow Jones Industrial Average got off to a good start this week, gaining almost 551 points on Monday alone. The S&P 500 index finished the day up 2.65 percent. The Nasdaq composite index gained 3.43% as a result of a comeback in technology stocks, headed by well-known companies such as Amazon, Meta Platforms, and Microsoft. Since July 27th, the tech-heavy index had its best day on this particular day.

The recent excellent start to earnings season may be a hint that the economy is now in better health than feared, despite the fact that worries of a recession and overly aggressive central banks have helped bring the U.S. markets to their lowest levels of the year in recent weeks.

Earnings for the third and fourth quarters should demonstrate that the fundamentals continue to be supported by a robust labor market and the reopening of Covid. The valuation of stocks will probably continue to be related to the statements and interest rates made by central banks around the world, which are becoming gradually less pessimistic. According to Dubravko Lakos-Bujas, head of global macro research at JPMorgan, in a note to clients, “we see equities primed for upside towards year-end on strong 2H22 profits, low equity positioning, highly negative sentiment, and given more reasonable pricing.”

“However, we anticipate a more challenging earnings backdrop for the coming year in comparison to current estimates,” he continued.

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