Strong Wal-Mart, Cisco earnings drive stocks higher
U.S. stocks closed sharply higher Thursday, snapping a two-day losing streak.
Investors cheered strong quarterly earnings from Wal-Mart Stores, Cisco Systems and other companies. Technology stocks accounted for much of the market’s gains, which helped lift the Nasdaq composite to its first record high in just over a week.
Health care companies and consumer product makers also posted solid gains. Energy and utilities stocks lagged. Oil prices declined.
The rally knocked the major stock indexes into positive territory for the month, as investors seized on the encouraging company earnings news to buy shares a day after the market suffered its worst decline in two months.
“Investors have been looking to buy on weakness and they got a little bit of it,” said Erik Davidson, chief investment officer for Wells Fargo Private Bank. “The desire to buy in dips has been very, very strong and we’ve seen a little bit of a dip.”
The Standard & Poor’s 500 index rose 21.02 points, or 0.8 percent, to 2,585.64. The Dow Jones industrial average gained 187.08 points, or 0.8 percent, to 23,458.36. The Nasdaq added 87.08 points, or 1.3 percent, to 6,793.29. The Russell 2000 index of smaller-company stocks picked up 22.79 points, or 1.6 percent, to 1,486.88.
The major stock indexes were poised to rebound from the start of trading Thursday following solid gains in markets in Europe and Asia. Investors shrugged off the prior day’s doldrums and welcomed latest batch of strong corporate earnings or outlooks.
Data storage company NetApp vaulted 15.9 percent as investors applauded its quarterly results and forecasts. The stock was the biggest gainer in the S&P 500 and one of the reasons technology stocks posted some of the biggest gains. Its shares rose $7.29 to $53.11.
Cisco Systems also delivered a bigger profit than analysts expected. The internet gear maker also said revenue should grow in the current quarter after two years of declines. Cisco shares climbed 5.2 percent, its biggest gain since February 2016. The stock added $1.77 to $35.88.
Wal-Mart also got a big boost, climbing 10.9 percent, its biggest gain since October 2008. In addition to posting strong third-quarter results, the retail giant raised its annual profit outlook. The stock rose $9.79 to $99.62.
“We’ve had very good earnings from Amazon, Google, Nvidia, Tencent, just to name a few,” said Tom Martin, senior portfolio manager with Globalt Investments. “Even with Wal-Mart you’re seeing a very strong reaction to the positives that are going on there.”
The quarterly report card from some companies failed to put traders in a buying mood.
Best Buy fell 3.6 percent after the electronics retailer’s latest quarterly results and forecast for the holiday season fell short of estimates. The stock slid $2.05 to $55.25.
Expectations of a big business tax cut have helped lift the market higher this year, though the Thursday afternoon House vote didn’t move the market’s much.