By Shreyashi Sanyal
(Reuters) – Wall Street’s main indexes jumped on Thursday as upbeat results and forecasts from IBM (NYSE:), AT&T and Dow Inc brought back cheer to the markets that were briefly taken aback by the political turmoil in the United Kingdom.
IBM Corp shares gained 4.3% after the IT services company beat quarterly earnings estimates on Wednesday and said it expects to exceed full-year revenue growth targets.
Fellow blue-chip stock Verizon Communications Inc (NYSE:) rose 1.6% after peer AT&T Inc (NYSE:) jumped 8.2% upon raising its annual profit forecast.
Both the companies lifted up the communication services sector index by 1.8% to lead gains among the 11 major sectors on the benchmark index.
Dow Inc rose 3.3% after the chemicals giant beat third-quarter profit estimates.
This comes after upbeat results from banks, Netflix Inc (NASDAQ:), Procter & Gamble (NYSE:) Co and Travelers Companies (NYSE:) Inc prompted analysts to raise third-quarter profit growth expectations for S&P 500 companies to 3.1% from a 2.8% increase earlier in the week. The estimate, however, is still sharply lower than an 11.1% increase that was forecast at the start of July.
“This is a shift from being a high-valuation growth market to more of a value market,” said David Russell, vice president of market intelligence at TradeStation.
“There’s a huge amount of negativity because when we look at a lot of these companies which hit multi decade lows not very long ago, are now posting results that beat estimates.”
Tesla (NASDAQ:) Inc, however, dropped 4.9% as the electric-vehicle maker flagged persistent logistics challenges, with fourth-quarter deliveries growing by less than the aimed 50%.
Wall Street’s main indexes have been hammered by worries over the fallout of aggressive interest rate hikes on corporate profits amid rising Treasury yields and no real signs of U.S. inflation slowing.
Data showed the number of Americans filing new claims for unemployment benefits fell unexpectedly last week, pointing to a tight labor market, while another reading showed factory activity in the Federal Reserve Bank of Philadelphia’s district contracted again in October.
The U.S. central bank is likely to deliver its fourth straight 75 basis-point hike in its November meeting, with some even pricing in a full percentage point increase.
At 12:05 p.m. ET, the was up 177.24 points, or 0.58%, at 30,601.05, the S&P 500 was up 11.04 points, or 0.30%, at 3,706.20. The was up 86.19 points, or 0.81%, at 10,766.69.
U.S. stocks were briefly pressured after UK’s Liz Truss announced her resignation as prime minister just six weeks into the job, brought down by an economic program that had sent shockwaves through global financial markets and divided her Conservative Party.
Advancing issues outnumbered decliners by a 1.53-to-1 ratio on the NYSE and by a 1.79-to-1 ratio on the Nasdaq. The S&P index recorded three new 52-week highs and 12 new lows, while the Nasdaq recorded 33 new highs and 127 new lows.
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