Earnings whip up risk appetite as Wall St sees higher open

Finance | 19 Oct 2021 10:07 pm

U.S. stock indexes were set to open higher on Tuesday as upbeat results and forecasts from Johnson & Johnson and Travelers fired up risk appetite, after big banks kicked off the third-quarter reporting period on a positive note last week.

Investors are now focusing on results from companies that are more exposed to supply chain constraints, price rises and labor shortages.

Johnson & Johnson's shares rose 0.2% after it raised its 2021 adjusted profit forecast, even as it stuck to its outlook of $2.5 billion in sales from its COVID-19 vaccine this year.

Travelers Cos Inc added 2.6% after the property and casualty insurer beat estimates for third-quarter profit.

The S&P 500 index is 1.3% away from a record-high hit in early September, with investors hoping that a flow of better-than-expected earnings reports could push the market to new highs despite concerns about an eventual tightening of monetary policy.

"We could actually see us hit a new all time high before the end of the year is out because of corporate profits and typical seasonal optimism," said Sam Stovall, chief investment strategist at CFRA.

Analysts now expect S&P 500 earnings to show a 32.4% rise from a year ago, according to Refinitiv data.

Large-cap technology and communications companies including Facebook Inc, Apple Inc, Alphabet Inc and Microsoft Corp all rose between 0.2% and 0.5%. Netflix Inc rose 0.1% ahead of its quarterly results later in the day.

Procter & Gamble Co fell 1.8% as it warned that higher commodity and freight costs would take a bigger bite out of earnings.

Tesla Inc edged 0.8% higher ahead of its quarterly results on Wednesday, with investors watching for indications of its performance in China.

Walmart Inc's shares rose 2.3% after Goldman Sachs added the world's largest retailer to its "Americas Conviction List".

At 8:34 a.m. ET, Dow e-minis were up 148 points, or 0.42%, S&P 500 e-minis were up 19 points, or 0.42%, and Nasdaq 100 e-minis were up 52 points, or 0.34%. -- Reuters



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