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Stock Market Climbs As Earnings Are Mainly Positive; These Big Companies Are Next

Strong earnings reports helped send the S&P 500 and Dow Jones Industrial Average to new highs Tuesday morning, and more key companies are reporting today.




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The S&P 500 climbed 0.5% and the Dow added 0.2% as the stock market Tuesday extended a three-week rally.

The Nasdaq composite rose 0.8%. Small caps lagged as the Russell 2000 was nearly flat. Volume rose on the Nasdaq and fell on the NYSE compared with the same time on Monday.

The stock market is giving mostly a thumbs-up to third-quarter earnings reports, although several reports today were weaker.

The number of  S&P 500 companies beating Q3 profit estimates is larger than average, and they are beating by wider margins than average, FactSet said in a report Friday.

U.S. Stock Market Today Overview

Index Symbol Price Gain/Loss % Change
Dow Jones (0DJIA) 35826.60 +85.45 +0.24
S&P 500 (0S&P5) 4590.92 +24.44 +0.54
Nasdaq (0NDQC ) 15345.72 +119.01 +0.78
Russell 2000 (IWM) 229.47 -0.10 -0.04
IBD 50 (FFTY) 50.19 +0.03 +0.06
Last Update: 10:12 AM ET 10/26/2021

The S&P 500 is on track for 32.7% EPS growth, which would be its third-highest growth since Q3 of 2010. Much of the improvement owes to easy comparisons from poor pandemic conditions.

Facebook Earnings Mixed

Facebook (FB) late Monday beat profit expectations. The stock fell after its revenue missed estimates. The social media company also said it will break out certain business units into separate reporting segments, a move that should give more transparency into the company’s performance.

The stock is testing the 200-day moving average. Shares fell 1.5% Tuesday morning.

Facebook was the first of several major companies that are reporting quarterly results this week. After today’s close, Microsoft (MSFT) reports September-ended quarter results. The stock is just above the 305.94 buy point of a flat base.

Visa (V), Advanced Micro Devices (AMD), Twitter (TWTR) and Alphabet (GOOGL) are other big names announcing after today’s close. Alphabet is forming a flat base, which makes today’s earnings report a possible catalyst for a move above the 2,925.17 buy point.

Earlier Tuesday, Eli Lilly (LLY) posted mixed third-quarter results. It gave full-year profit and guidance above views. The stock fell 2%.

Chip, Transportation Earnings For Stock Market

UPS (UPS) beat third-quarter expectations, sending shares past the 215.03 buy point of a cup base. As one of the largest delivery and logistics companies, UPS is considered a bellwether of economic activity. This time, its results take on a different dimension because of snarled supply chains.

In a measuring stick for the semiconductor industry, chip equipment maker Entegris (ENTG) beat profit estimates but missed sales expectations, and its guidance was light. Entegris shares erased a big drop and were nearly unchanged.

Innovator IBD 50 ETF (FFTY) underperformed with a gain of 0.1%. InMode (INMD), Upstart Holdings (UPST) and Lovesac (LOVE) were down 3.5% to 5%.

Jefferies downgraded Upstart from buy to hold. InMode reported Q3 earnings before the open that rose 86% with sales up 58%. It forecast full-year sales of $343 million to $347 million with EPS of $1.91 to  $1.93.

Stock Market Breakouts Include CrowdStrike

CrowdStrike (CRWD) rose above the 289.34 buy point of a cup base in heavy volume. Nvidia (NVDA) gapped up to a new high in active trading, leaving shares further extended from the 230.53 buy point.

The stock market digested economic news. The S&P CoreLogic Case-Shiller National Home Price Index rose 19.8% in the 12-month period that ended in August. It was unchanged from the prior month and reflects a still-hot housing market.

September new home sales jumped 14% to 800,000, above estimates for 760,000.

Juan Carlos Arancibia is the Markets Editor of IBD and oversees our market coverage. Follow him at @IBD_jarancibia

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