Dow jumps more than 2% as US stocks rebound on strong earnings

Wall Street stocks surged higher on Tuesday as a batch of strong earnings reports pushed aside lingering doubts about the economy and trade fights that have pressured markets.

The Dow Jones Industrial Average finished a buoyant session a hair below session peaks, ending at 25 798.42 points, up 2.2% or nearly 550 points. The broad-based S&P 500 also gained 2.2% to 2 809.92, while the tech-rich Nasdaq Composite Index jumped 2.9% to 7 645.49.

Investors were cheered by strong earnings from banks and health care companies that helped them ignore - at least for now - the worries about trade fights and higher US interest rates that had sparked a steep, two-day selloff last week.

"Today what we are seeing is largely related to earnings results," said Lindsey Bell, investment strategist at CFRA Research, who added that the earnings thus far, while upbeat, came from a relatively small number of major companies. "It is not going to be all good news throughout the earnings season," she said.

Investment banks Morgan Stanley and Goldman Sachs won 5.8% and 3.0% following earnings results.

Dow members Johnson & Johnson and UnitedHealth Group won 2.0% and 4.6% after reporting earnings.

Another Dow company, Walmart jumped 2.1% despite cutting its full-year earnings forecast following spending connected to a large acquisition in India. The giant retailer argued the investment was needed to meet consumer demand as it competes with Amazon for market share.

Software giant Adobe shot up 9.5% after outlining revenue targets that topped analyst expectations.

Analysts also cited Labour Department data that showed record job openings in August, suggesting a tightening labour market.

* Sign up to Fin24's top news in your inbox: SUBSCRIBE TO FIN24 NEWSLETTER
ZAR/USD
17.62
(-1.25)
ZAR/GBP
23.01
(-0.54)
ZAR/EUR
20.78
(-0.41)
ZAR/AUD
12.62
(-0.16)
ZAR/JPY
0.17
(-0.83)
Gold
2031.70
(-1.76)
Silver
28.22
(-5.12)
Platinum
963.00
(-3.55)
Brent Crude
45.10
(-0.18)
Palladium
2177.00
(-2.22)
All Share
56757.73
(-1.56)
Top 40
52435.65
(-1.72)
Financial 15
9897.96
(+0.10)
Industrial 25
74671.49
(-1.98)
Resource 10
58948.78
(-1.89)
All JSE data delayed by at least 15 minutes morningstar logo
Company Snapshot
Voting Booth
Do you think it was a good idea for the government to approach the IMF for a $4.3 billion loan to fight Covid-19?
Please select an option Oops! Something went wrong, please try again later.
Results
Yes. We need the money.
11% - 926 votes
It depends on how the funds are used.
74% - 6217 votes
No. We should have gotten the loan elsewhere.
15% - 1278 votes
Vote