US Stocks Rebound Strongly
26 October 2018, 01:59
Major U.S. stock indexes made strong gains in Thursday’s trading after some upbeat profit reports by major companies.
The Nasdaq composite posted its biggest daily gain since March, as Microsoft’s upbeat earnings spurred a rebound in technology names and investors snapped up oversold shares. The Nasdaq added 209.94 points, or 2.95 percent, to 7,318.34, a day after it confirmed a correction and registered its biggest decline since 2011.
The Dow Jones industrial average rose 401.13 points, or 1.63 percent, to 24,984.55, while the Standard amp; Poors 500 gained 49.47 points, or 1.86 percent, to 2,705.57. Both moved back into positive territory for the year.
In Europe, France’s key index jumped 1.6 percent, while German and British stock prices made smaller gains.
Variety of gainers
The latest round of good U.S. results came from a variety of companies, including Ford Motor Co., Visa Inc., Whirlpool Corp. and Twitter Inc., and offered relief after the earnings season began slowly and stumbled further on sluggish outlooks from manufacturers and chipmakers.
Stocks have sold off recently amid worries about rising interest rates, growing trade tensions between the world’s two largest economies, China’s slowing economy and the fading impact of the recent U.S. tax cut on company profits.
In a further sign that economic growth is moderating, U.S. business spending on equipment appeared to have remained slow in September and the goods trade deficit grew as rising imports outpaced a rebound in exports.
But the recent sell-off has also made stocks a bit cheaper. The Samp;P 500’s valuation fell to a 2-year low of 15.3 times profit estimates for the next 12 months from 15.8, according to trading and data business Refinitiv.
Results from Samp;P 500 companies have pushed up third-quarter profit growth estimates to 23.6 percent from 21.8 percent in the last 10 days. But forecasts have trimmed fourth-quarter growth estimates to 19.4 percent from 19.9 percent, according to I/B/E/S data from Refinitiv.