Dow jumps 250 points, breaks above 26,000 once again
- The S&P 500 gained 0.8 percent, with staples and tech as the best-performing sectors.
- Bank of America reported adjusted quarterly earnings that surpassed analyst estimates.
- Earnings season is off to a strong start thus far.
Jan 17, 2018
Stocks traded higher on Wednesday following the release of stronger-than-expected quarterly results from some of the biggest U.S. companies.
The Dow Jones industrial average rose 219 points, breaking above 26,000 once again. The index first broke above the milestone mark on Tuesday, but failed to close above it.
Bank of America reported adjusted quarterly earnings that surpassed analyst estimates. U.S. Bancorp also posted better-than-expected results.
Earnings season is off to a strong start thus far. Of the S&P 500 companies that had reported as of Wednesday, 78 percent have surpassed earnings-per-share estimates while 89 percent have beaten expectations on the top line, according to Nick Raich, CEO of The Earnings Scout.
“You’ve got a bullish start to the earnings season and earnings are expected to be strong for 2018,” said Adam Sarhan, CEO of 50 Park Investments. He added: “The very strong underlying trend for the market remains in place.”
Equities closed lower on Tuesday after a sharp reversal from record levels. The Dow closed 10 points lower after rising as much as 283 points and breaking above 26,000 for the first time.
The reversal took place as concerns of a government shutdown loomed over investors’ minds. Congress needs to pass a spending bill by the end of Friday to avoid a government shutdown.
Robert Pavlik, chief investment strategist at SlateStone Wealth, said there were concerns in the market that stocks had risen too much too quickly. “The government shutdown played right into that,” he said. “I think the pullback was cooler heads prevailing. I don’t want people chasing the market and pushing it higher for no reason.”
Overseas, European stocks fell slightly, with the Stoxx 600 slipping 0.1 percent. In Asia, the Nikkei 225 fell 0.4 percent.
Elsewhere, shares of Juno Therapeutics spiked 48 percent higher after The Wall Street Journal reported the company was in talks to be acquired by Celgene.