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US stocks continued their earnings streak on Tuesday, with the Dow and S&P 500 closing at record highs for the second day in a row as investors processed a slew of earnings reports from some of the largest US companies. All three major indices ended in positive territory.
How did the benchmarks perform?
The Dow Jones Industrial Average (DJI) climbed less than 0.1% or 15.73 points and finished at a new all-time high of 35,756.88 points. The blue-chip index previously hit an intraday high of 35,892.92 but failed to sustain gains.
The S&P 500 gained 0.2% or 8.31 points and closed at a new all-time high of 4,574.79 points, after an intraday high of 4,598.53 points.
Energy and utility stocks once again outperformed, while communications services were again a barrier. The Communication Services Select Sector SPDR (XLC) fell 0.9%, while the Energy Select Sector SPDR (XLE) rose 0.6%. The Utilities Select Sector SPDR (XLU) gained 0.5%. Nine of the benchmark index’s 11 sectors ended in positive territory.
The tech-heavy Nasdaq rose 0.1% or 9.01 points and ended at 15,235.71 points. The index nearly reached its September 7 closing record of 15,374.33 points, after hitting 15,384 points at one point in the day. The shares of Facebook, Inc. FB fell 3.9. Facebook has a Zacks Rank #3 (Hold). You can see the full list of current Zacks #1 Rank (Strong Buy) stocks here.
The fear meter CBOE Volatility Index (VIX) rose 4.86% to 15.98. In total, 12.34 billion shares were traded on Tuesday, higher than the average of 10.41 billion over the last 20 sessions. Decliners outperformed the avant-garde on the NYSE by a 1.13-to-1 ratio. On Nasdaq, a 1.23-to-1 ratio favored declining issuance.
Investors’ Digest Quarterly Results
Markets started off on a high on Tuesday after the rally from the previous session. A slew of big tech names announced robust third quarter earnings reports, boosting investor sentiment. Investors now seem less concerned about inflation and more focused on quarterly results. As a result, the S&P 500 has made gains in nine of its last 10 sessions.
Among the big names to report their quarterly results on Tuesday were Lockheed Martin Corporation LMT and Eli Lilly and Company LLY. Lockheed Martin reported adjusted earnings of $6.66 per share, which beat the Zacks Consensus Estimate of $1.96. Eli Lilly reported adjusted earnings of $1.94 per share, falling short of the Zacks Consensus Estimate of $1.98 per share.
However, it was Facebook that reported its third quarter results Monday, which weighed on all major indices around noon on Tuesday. Shares of the social media giant traded higher and flat at one point, but then bottomed out. At one point, it dropped as low as 5%.
Facebook missed analyst expectations for revenue and monthly active users, despite exceeding profit expectations. It reported quarterly earnings of $3.22 per share, outperforming the Zacks Consensus Estimate at $3.20 per share. Revenue of $29.01 billion lagged the Zacks Consensus Estimate of $29.55 billion.
A number of big names will report their quarterly results in the coming days of the week and investors are eagerly awaiting.
Economic data
In economic data released Tuesday, the Case-Shiller Home Price Index showed house prices rose 19.8% year-on-year in August. However, it was in line with the previous month’s increase.
Separately, the Commerce Department said new home sales jumped 14% in September to reach a seasonally adjusted annual rate of 800,000 units. Analysts had expected new home sales to rise to 760,000 units. This is also the highest level since March. August sales were revised to 702,000 units from the 740,000 units initially reported.
In other economic data, the Conference Board reported that the US consumer confidence index rose to 113.8 in October, from a revised 109.8 in September. The October jump comes after three consecutive months of decline.
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Lockheed Martin Corporation (LMT): Free Stock Analysis Report
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Facebook, Inc. (FB): Free Stock Analysis Report
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