Wall Street Sets More Records Monday 10/25 16:03
Wall Street ticked further into record heights on Monday, as a
better-than-expected profit reporting season gets into higher gear.
NEW YORK (AP) -- Wall Street ticked further into record heights on Monday,
as a better-than-expected profit reporting season gets into higher gear.
The S&P 500 rose 21.58 points, or 0.5%, to 4,566.48 and surpassed its last
record set on Thursday. The Dow Jones Industrial Average also reached an
all-time high after adding 64.13, or 0.2%, to 35,741.15. The Nasdaq composite
picked up 136.51, or 0.9%, to 15,226.71.
Tesla jumped to the biggest gain in the S&P 500 after Hertz said it will buy
100,000 Model 3 vehicles for its fleet. The landmark deal for the
electric-vehicle industry sent Tesla up 12.7%, and because it's one of the
biggest stocks in the market, Tesla's moves have an outsized effect on the S&P
Stocks broadly have been pushing higher recently as companies turn in much
stronger profit reports for the summer than analysts expected. With roughly one
in four S&P 500 companies having reported, more are topping expectations than
usual, and by a wider margin, according to FactSet.
S&P 500 companies so far have reported profits for the third quarter that
were nearly 46% higher than year-ago levels. That has companies in the index on
track to report overall growth of roughly 32.5%, according to FactSet. That
compares with expectations for roughly 27% growth when the third quarter closed
on Sept. 30.
Several of the market's most influential stocks are set to report their own
profits in the upcoming week. That includes Apple, Microsoft, Amazon and
Google's parent company, Alphabet. Because they're the four biggest companies
on Wall Street by market value, their stock movements have a huge effect on the
S&P 500, even more than Tesla's.
Facebook, the fifth-largest company in the S&P 500, gave its latest report
after trading ended Monday. It's been dealing with controversy over how much it
favors making profits over harming its users, but its earnings nevertheless
squeaked by Wall Street's forecasts, though its revenue fell short.
High inflation that's been more stubborn than expected also continues to
create winners and losers in the market.
Stocks of energy companies were strong after the price of U.S. oil topped
$85 per barrel during the morning. It's the first time that's happened in
roughly seven years, though the price sank back as the day continued.
But such gains were checked by losses for Kimberly-Clark, the maker of
Kleenex and Huggies diapers, and other consumer products companies that are
struggling with the effects of high inflation.
Kimberly-Clark cut its forecast for full-year 2021 profit because of the
higher costs it's paying for energy and other goods. It's also one of many
companies dealing with snarled supply chains around the world as economies
bounce back from the pandemic's shutdown. Its stock fell 2.2%.
High inflation has stuck around, even though many economists and investors
had earlier said they expected only a "transitory" bout.
Fed Chair Jerome Powell said on Friday that inflation is likely to stay
elevated well into next year amid gummed-up supply chains and shortages. That
could put pressure on the central bank to halt the record-low interest rates
that it's been providing to support markets and the economy.
The central bank is preparing to soon slow its monthly bond purchases meant
to keep longer-term interest rates low, but a move on short-term interest rates
doesn't appear imminent.
The yield on the 10-year Treasury fell to 1.63% from 1.65% late Friday.
Historically low interest rates, along with strong corporate profit growth,
have helped the S&P 500 more than double from the bottom it set in March 2020
in the early days of the pandemic.
The pandemic remains, of course. A resurgence of infections during the
summer helped to slow the economy's growth, and some on Wall Street worry about
how big a hit corporate profits will ultimately take because of it.
Moderna rose 7% after it reported encouraging data on use of its COVID-19
vaccine in children.
European and Asian stock markets ended mixed.