Dow, S&P 500 end at record highs on same day for first time in 2 months as Wall St. braces for earnings deluge
By Vivien Lou Chen and Mark DeCambre
Nasdaq Composite ends less than 1% from Sept. 7 record closing high
U.S. stock benchmarks finished at, or near, record highs Monday, ahead of a heavy slate of earnings for the week. Investors are counting on the prospects of slowing growth to keep the Federal Reserve from tightening monetary policy by too much down the road.
How did major indexes perform?
What drove the market
Consumer-discretionary, energy, and materials shares helped buoy the market Monday, in what is slated to be a busy week of quarterly results from American corporations.
This week's earnings calendar features more than 150 S&P 500 companies, or nearly a third of the broad-market index, including Facebook Inc. (FB), which reported after the closing bell Monday. "Earnings have been positive so far and there's a chance we turn back to full rally mode now that we've made it through the most unfavorable part of fall," said Phillip Toews, chief executive of Toews Asset Management. However, "one thing that could potentially set back stocks is if yields moved much higher."So far, strong earnings are helping to keep the market's bullish uptrend intact, even as concerns about inflation persist.The rise in stocks comes amid what investors regard as a "benign backdrop," despite fears of a stagflationary-like environment building in the U.S., said Oliver Allen, a markets economist for London-based Capital Economics. "While doubts have grown surrounding the strength of the U.S. economic recovery, the very low level of inflation-adjusted yields suggests that investors do not expect the Fed to be especially aggressive when it comes to raising rates," Allen said via phone Monday.
Meanwhile, UBS Global Wealth Management is one of the firms remaining positive about equities. It points to encouraging signs from companies that've already reported third-quarter earnings. Some signs include strong revenue growth that is offsetting higher costs, and supply-chain disruptions which have been no worse than expected while remaining relatively concentrated in certain industries. "Continued solid profit growth is a core pillar of our outlook for further equity market gains," Chief Investment Officer Mark Haefele wrote in a note Monday. "We advise investors to buy winners from global growth, including energy and financials."
Markets also will have an eye on Washington, D.C., as pivotal Democratic Sen. Joe Manchin appeared to back taxes on billionaires and certain corporations, according to the Associated Press, with the total price tag on a social services and climate change package estimated at $1.75 trillion. Manchin told reporters on Monday that he believes Democrats should be able to get a deal on a framework agreement this week, based on a report from The Hill.
Read: What's in -- and not in -- Democrats' big social-spending bill, as billionaire tax gains steam
Meanwhile, in public health news, Moderna Inc. MRNA said that children between the ages of 6 and 11 years old get a strong response against COVID-19, based on data from a Phase 2/3 clinical study evaluating children's vaccine response.
Dr. Anthony Fauci, head of the National Institute of Allergy and Infectious Diseases and President Joe Biden's chief medical adviser, said he expects children aged 5 to 11 to become eligible for vaccines by early-to-mid November. A review panel for the U.S. Food and Drug Administration found last week that the benefits of the shots outweigh risks, and an advisory committee will convene Tuesday to discuss the matter. If they vote in favor and the CDC grants final approval by next week, children could start getting their shots shortly after, Fauci told ABC News on Sunday.
-Vivien Lou Chen
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(END) Dow Jones Newswires
October 25, 2021 16:41 ET (20:41 GMT)
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