NEW YORK: The Dow Industrials forged ahead at the open on Thursday, driven by gains across sectors, but losses in Celgene held back the two other major Wall Street indexes in one of the busiest days of third-quarter earnings.
Earnings have been largely positive, with 72 percent of the S&P 500 companies that reported as of Wednesday topping expectations and matching the average for the past four quarters.
However, with US indexes at record levels, investors are taking a closer look at earnings to see if they justify stretched valuations.
Technology giants Alphabet, Amazon, Microsoft and Intel report after the bell.
“Investors’ expectations for forward guidance are very high, and any misses will continue to be punished,” said Peter Cecchini, chief market strategist at Cantor Fitzgerald in New York.
“The dispersion in reaction to the performance of companies that don’t meet expectations is a lot worse than if it does. Not everything is going up, people are actually paying attention to what the actual results are, which is actually somewhat new.”
Celgene’s shares plunged 20 percent after it reported lower-than-expected sales for its flagship multiple myeloma drug Revlimid and its psoriasis drug Otezla.
At 9:40 a.m. ET (1340 GMT), the Dow Jones Industrial Average was up 102.76 points, or 0.44 percent, at 23,432.22, the S&P 500 was up 5.74 points, or 0.22 percent, at 2,562.89 and the Nasdaq Composite was up 1.75 points, or 0.03 percent, at 6,565.64.
The market will also closely watch on any news of an announcement for the next Fed chair.
A report by Politico said that current Fed Chair Janet Yellen and former Fed Governor Kevin Warsh were out of the race for the central bank’s top job.
Fed Governor Jerome Powell and Stanford University economist John Taylor are the frontrunners, the report added.
However, a White House official said no final decision had been made.
Ten of the 11 S&P sectors were higher, led by gains in telecom services index.
Healthcare sector was the only laggard with some drugmaker’s results failing to impress investors.
Bristol-Myers Squibb fell 3.5 percent after the company said its gross margin, as a percentage of revenue, fell.
AbbVie dropped 3.05 percent after reporting deaths in psoriasis studies.
Twitter jumped 14 percent after the company said it could turn its first ever profit in the fourth quarter, helped by cost cuts and new sources of revenue.
Ford gained 2 percent after reporting a better-than-expected profit, driven by sales of high-margin pickup trucks and SUVs in the US market and cost cutting.
Advancing issues outnumbered decliners on the NYSE by 1,546 to 982. On the Nasdaq, 1,311 issues rose and 1,029 fell.
Source: Brecorder.com
