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Wall Street advances on earnings but healthcare lags
U.S. stocks advanced on Thursday to recover some declines from the prior session, after a round of positive corporate earnings, although gains were curbed by a drop in the healthcare sector.
As third-quarter earnings season nears the half-way mark, 74 percent of companies have topped expectations, above the 72 percent beat rate for the past four quarters.
However, earnings growth for the quarter is currently 5.3 percent, well below the double-digit growth rates of the prior two quarters. With major U.S. indexes at record levels, earnings have been scrutinized to see if they warrant stretched valuations.
"It’s not terribly popular to be saying it makes sense the markets are hitting new highs, but I look and I see a good economic backdrop, I see earnings growth and I see central banks basically managing quite well on the exit," said Ron Temple, Head of US Equities and Co-Head of Multi Asset Investing at Lazard Asset Management in New York.
"So what could go wrong - the single biggest factor that is hard to predict is who is the new Fed chair."
Trump`s search has narrowed down to Fed Governor Jerome Powell and Stanford University economist John Taylor, according to a Politico report. A White House official told Reuters that no final decision had been made.
In a step towards enacting Trump`s tax cut plan, the U.S. House of Representatives voted to clear a procedural path forward for the tax bill, which is expected to be unveiled next week.
The Dow Jones Industrial Average <.dji> rose 98.56 points, or 0.42 percent, to 23,428.02, the S&P 500 <.spx> gained 7.65 points, or 0.30 percent, to 2,564.8 and the Nasdaq Composite <.ixic> added 7.80 points, or 0.12 percent, to 6,571.70.
The healthcare sector, off 1.01 percent, held gains in check, led lower by a 19.6-percent plunge in Celgene
A fall of 4.5 percent in Bristol-Myers Squibb
Advancing issues outnumbered declining ones on the NYSE by a 1.22-to-1 ratio; on Nasdaq, a 1.14-to-1 ratio favoured advancers.
(This article has not been edited by Zeebiz editorial team and is auto-generated from an agency feed.)
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