Oct 27 (Reuters) – The blue-chip Dow rose on Thursday following a slew of upbeat earnings reports and data that showed U.S. economic growth rebounded in the third quarter, while the Nasdaq was pressured by a drop in Meta shares.
Caterpillar Inc (CAT.N) jumped 9.2%, boosting the Dow Jones Industrial Average (.DJI), as the heavy-equipment maker posted a rise in third-quarter profit, while McDonald’s Corp (MCD.N) added 3.6% on beating quarterly comparable sales estimates.
Merck & Co Inc (MRK.N) rose 2.4% and Honeywell International Inc (HON.O) climbed 4.2% as both the companies reported better-than-expected third-quarter earnings. read more
Meanwhile, Facebook-parent Meta Platforms Inc (META.O) slumped 21.1%, putting it on course to lose nearly $82 billion in market value, as it posted a drop in third-quarter profit and forecast a weak holiday quarter.
The S&P 500 communication services sector (.SPLRCL) tumbled 2.1% and was the sole decliner among the 11 major benchmark sector indexes.
Shares of Amazon.com Inc (AMZN.O) were down 1.6%, while Apple Inc (AAPL.O) also fell 1.0%. Both the companies are due to report results later on Thursday.
Analysts have set the bar low for the third-quarter reporting season, with aggregate S&P 500 profit growth now seen at 2.3% year-on-year, compared with 4.5% at the start of the month, according to Refinitiv data.
All the three main indexes had opened higher after data showed U.S. gross domestic product increased at a 2.6% annualized rate last quarter, ending two straight quarterly decreases in output that had raised concerns that the economy was in recession.
The U.S. Federal Reserve is set to increase interest rates by 75 basis points in an upcoming meeting next week, with traders betting on a 50 basis point raise in December. FEDWATCH
“For the first time in months, the stock market has a real two-way risk,” said Chris Zaccarelli, chief investment officer at Independent Advisor Alliance in Charlotte, NC.
“Since February the stock market has headed mostly down as investors priced in a new world of much higher interest rates, but we are now in a situation where stocks have priced in a mild recession.”
Data scheduled for Friday is expected show the Fed’s preferred measure of inflation continued to run at roughly three times the U.S. central bank’s annual target last month.
At 10:24 a.m. ET, the Dow Jones Industrial Average (.DJI) was up 487.07 points, or 1.53%, at 32,326.18, the S&P 500 (.SPX) was up 21.18 points, or 0.55%, at 3,851.78, and the Nasdaq Composite (.IXIC) was down 8.49 points, or 0.08%, at 10,962.50.
Advancing issues outnumbered decliners for a 2.64-to-1 ratio on the NYSE and a 1.81-to-1 ratio on the Nasdaq.
The S&P index recorded 21 new 52-week highs and six new lows, while the Nasdaq recorded 48 new highs and 42 new lows.
Reporting by Amruta Khandekar and Shreyashi Sanyal in Bengaluru; Editing by Shounak Dasgupta
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