Stocks recovered their early losses Wednesday as companies posted strong financial results, lifting hopes that the country’s economic growth is rebounding.
The Dow Jones industrial average rose 176 points, or 0.9 percent, to 22,414. The Standard & Poor’s 500 index gained 27 points, or 1.2 percent, to 2,506. The Nasdaq composite added 81 points, or 1.3 percent, to 6,460. The Russell 2000 index of smaller-company stocks climbed 18 points, or 1.2 percent, to 1,398.
Walmart led consumer companies higher with a 3.2 percent gain to $114.70 after reporting a stronger-than-expected quarterly profit. Microsoft rose 1.9 percent to $110.01 and Home Depot climbed 2.2 percent to $213.02 after both companies posted better-than-expected quarterly earnings.
Broadcom jumped 7.3 percent to $257.76 after topping Wall Street’s profit and revenue forecasts. The chipmaker reported strong growth from its high-tech chips and reported a stronger outlook for its most important quarter than most analysts had forecast.
Investors have been fretting that a government shutdown over border security would hit the United States and exacerbate what some see as a double-digit Federal Reserve interest rate hike cycle. At some point that has to end, but Federal Reserve Chairman Jerome Powell said last week that rates will remain low for a “very long time” if they help keep inflation under control.
However, Powell also noted that the economy was growing and pointed to continued job gains, so it could take some time for the U.S. economy to reach a key level where the U.S. and U.S. economy are ready for higher rates.
Facebook closed down 6.8 percent to $142.55 on reports that the company may be in trouble for how it processed user data. The latest controversy comes months after Facebook was rocked by a scandal over its sharing of people’s personal information with a political consulting firm that worked for President Donald Trump’s 2016 campaign.
It’s not just Facebook that’s under scrutiny as investor focus on data security ramped up after the Cambridge Analytica scandal.
Google parent Alphabet picked up 2.1 percent to $1,401.40 and Twitter rose 3.6 percent to $31.41 after both companies reported strong earnings. Alphabet said it may launch a new line of smart devices called Daydream View next month. Sales of the devices could help the company gain revenue from the high-priced headsets instead of relying on its search advertising business.
Published: Oct. 16, 2018 12:48 PM