Wall Street rose Tuesday after Verizon, General Electric and other big companies reported fatter profits for the summer than expected.
- The S&P 500 rose 30.64 points, or 0.7%, to 4,247.68, breaking a five-day losing streak.
- The Dow Jones Industrial Average was up 204.97 points, or 0.6% to 33,141,38.
- The Nasdaq composite rose 121.55 points, or 0.9%, to 13,139,87.
Verizon jumped 9.2% after saying it increased its number of broadband subscribers by 20% and earned more than analysts expected during the summer.
General Electric rallied 6.5% after delivering better-than-expected earnings and raising its profit forecast for the year. Coca-Cola rose 2.9% after it said growth in Mexico, India, and other markets helped drive it to better profit during the summer than analysts expected. The pace is picking up for companies to report their results for the summer, with more than 30% of companies in the S&P 500 on the schedule for this week. The broad hope is for S&P 500 companies to report the first growth in earnings per share in a year. Such strength is crucial for the stock market to stabilize. It's been mostly struggling since the summer under the weight of much higher yields in the bond market.
Strong recent reports have driven expectations for the US economy's growth in the third quarter of the year sharply higher. Economists at Goldman Sachs, for example, have raised their forecast for the quarter's growth to 4.6% from just 1.5% in mid-August. A preliminary report on Tuesday said business activity is strengthening in October by more than economists expected. The report from S&P Global indicated demand for manufacturers improved for the first time since April. While such strength has prevented a recession, it could also be giving inflation fuel and encouraging the Fed to keep rates high for longer. That in turn could lead to more weakness in the future.
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