Shares rose sharply on Tuesday as investors looked to capitalize on Monday’s rally amid a busy week of corporate earnings.
The Dow Jones Industrial Average gained 453 points, or about 1.5%. The S&P 500 and the Nasdaq Composite gained 1.5% and 1.6% respectively.
Tuesday’s strong results fueled a rally that began on Monday. Goldman Sachs rose more than 4% after strong trading results helped the investment bank beat earnings and revenue expectations.
This report continued strong gains in bank earnings, including beats from Bank of America and Bank of New York Mellon on Monday. Lockheed Martin also rose nearly 3% after its earnings per share beat estimates.
Elsewhere, Salesforce rose 6% after activist Starboard Value LP disclosed a stake in the software giant, pushing the Dow Jones higher. Shares of Colgate-Palmolive gained nearly 3% after Dan Loeb’s Third Point took a stake in the company, CNBC’s David Faber reported.
The Dow is off to a strong start to the week, adding around 551 points on Monday. The S&P 500 also rose 2.65% for the day. The Nasdaq jumped 3.43% as tech stocks rebounded, led by names including Amazon, Meta Platforms and Microsoft. It was the best day for the tech-heavy index since July 27.
Fears of a recession and overly aggressive central banks have helped push U.S. markets to yearly lows in recent weeks, but the strong start to the earnings season could signal that the economy is currently in better shape. provided that.
“The 3rd and 4th quarter results should confirm that the fundamentals remain anchored in a resilient labor market and the reopening of Covid. Equity valuation is likely to remain tied to global central bank rhetoric and rates, which are becoming less and less negative. As such, we see equities bracing for the upside in the year-end on resilient 2H22 earnings, low equity positioning, very negative sentiment and a more reasonable valuation.” said Dubravko Lakos-Bujas, head of global macro research at JPMorgan, in a note to clients.
“Next year, however, we expect a more challenging earnings environment compared to current expectations,” he added.