J&J, Powell comment push Wall Street higher; Netflix weighs
Wall Street rose on Tuesday as Federal Reserve Chairman Jerome Powell`s optimistic view on the U.S. economy and solid earnings from Dow component Johnson & Johnson lifted expectations of a robust second-quarter earnings season.
Powell, discounting the risk that a trade war may throw a global recovery off track, said there were still "several years" of strong jobs and low inflation ahead for the United States, and that an era of stable growth may continue provided the Fed gets its policy decisions right.
"He reiterated the view of the economy as being strong, growing at a solid pace with recent inflation data as more or less encouraging, and he`s taking the same stance he did in the last statement," Peter Cecchini, chief market strategist at Cantor Fitzgerald in New York.
"His takeaway was job market is strong, inflation is going to stay near 2 percent, that means two more hikes this year, in line with the dot plot."
Powell`s comments come as investors focus more on company forecasts to assess the sustainability of earnings growth in the wake of escalating U.S.-China trade dispute.
Analysts have forecast a near 21 percent surge in second-quarter earnings for S&P 500 companies, according to Thomson Reuters data.
Helping bolster market optimism was Johnson & Johnson, which rose 4 percent after the healthcare giant beat quarterly profit estimates on strong demand for cancer drugs.
The stock gave the biggest boost the S&P 500 and the blue-chip Dow Jones Industrial Average.
Netflix slumped 7.9 percent and was on track for its biggest one-day drop in two years after the company`s quarterly subscriber growth missed expectations, fanning fears that its rapid expansion is slowing.
The stock, one the best performing this year, weighed the most on the S&P 500 and the Nasdaq.
At 11:19 a.m. EDT the Dow Jones Industrial Average was up 17.26 points, or 0.07 percent, at 25,081.62, the S&P 500 was up 5.82 points, or 0.21 percent, at 2,804.25 and the Nasdaq Composite was up 14.21 points, or 0.18 percent, at 7,819.93.
Three of the 11 major S&P sectors were lower, led by 0.4 percent decline in energy stocks due to drop in U.S. crude oil prices. The top gainer was the materials index, which rose 0.9 percent.
UnitedHealth dropped 3.5 percent and was the biggest drag on Dow after the health insurer reported quarterly medical costs that were slightly higher than expectations.
Goldman Sachs slipped 1.3 percent after reporting trading results that were weaker than some rivals, with analysts pointing out that its better-than-expected profit was due to low-profile businesses such as investing and lending.
Advancing issues outnumbered decliners by a 1.49-to-1 ratio on the NYSE and by a 1.69-to-1 ratio on the Nasdaq.
The S&P index recorded six new 52-week highs and one new low, while the Nasdaq recorded 46 new highs and 32 new lows.
(This article has not been edited by Zeebiz editorial team and is auto-generated from an agency feed.)
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