Wall Street moves higher on Brexit deal with European Union, robust earnings
The stock helped the communication services sector gain 0.7%, the biggest among the 11 major S&P 500 sectors trading higher.
US stocks rose on Thursday, supported by Netflix and Morgan Stanley following upbeat reports, with investors also cheering Britain`s preliminary last-minute deal with the European Union. British Prime Minister Boris Johnson said "we have a great new Brexit deal," lifting the mood across global equities, but he still faces a tough vote in parliament on Saturday.
"It seems as if the Brexit deal is being viewed as a modest positive by investors but along with the tentative U.S.-China trade deal, the devil is in the details," said Michael Geraghty, equity strategist at Cornerstone Capital Group in New York. "From where we are right now investors are viewing the glass as half full."
Netflix Inc shares jumped 4.8%, after the video streaming service provider added slightly more paying subscribers than Wall Street expected in the third quarter.
The stock helped the communication services sector gain 0.7%, the biggest among the 11 major S&P 500 sectors trading higher. Morgan Stanley climbed 3.6% after the bank beat analysts` expectations for quarterly profit, buoyed by higher revenue from bond trading and M&A advisory fees.
Bank stocks gained 0.9%, while financials rose 0.7%. Results from Morgan Stanley wrapped up upbeat earnings from major U.S. banks including JPMorgan Chase & Co, Citigroup Inc and Bank of America.
"So far so good. Definitely the bank earnings have been terrific, relative to expectations," said Paul Nolte, portfolio manager at Kingsview Asset Management in Chicago.
Supporting sentiment was White House economic adviser Larry Kudlow`s comments that he sees momentum to finalize the initial phase of a US-China trade deal outlined last week, adding it may be signed at the APEC forum next month.
Rising uncertainties around the trade war, increasing geopolitical risks and weak domestic economic indicators have recently hit sentiment, with investors squarely focused on third-quarter earnings.
Analysts are expecting S&P 500 third-quarter earnings to fall by 2.9%, which would mark the first year-on-year contraction since 2016.
Of the 63 S&P 500 companies to have posted quarterly results so far, 82.5% have beaten estimates. At 9:49 a.m. ET, the S&P 500 was up 16.73 points, or 0.56%, at 3,006.42 and the Nasdaq Composite was up 54.22 points, or 0.67%, at 8,178.40.
The Dow Jones Industrial Average was up 82.55 points, or 0.31%, at 27,084.53. Limiting gains on the blue-chip index was a 5.4% fall in shares of International Business Machines Corp after the company missed quarterly revenue estimates.
The Dow Jones Transports index, which is closely watched by investors to gauge the health of the economy, was up 0.53%. CSX Corp shares rose 3.6% after the railroad operator beat quarterly profit expectations, while peer Union Pacific Corp fell 1.5% on missing earnings estimates.
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Advancing issues outnumbered decliners by a 4.25-to-1 ratio on the NYSE and by a 3.16-to-1 ratio on the Nasdaq. The S&P index recorded 24 new 52-week highs and two new lows, while the Nasdaq recorded 29 new highs and 14 new lows.
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