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Stocks traded sharply higher on Tuesday as investor sentiment was boosted by strong results from some of the biggest U.S. companies.
The Nasdaq composite advanced 1.7 percent as shares of Netflix jumped 9.8 percent to a record high. The Dow Jones industrial average rose 219 points, with UnitedHealth as the best-performing stock in the index. The S&P 500 gained 1 percent, as consumer discretionary and tech gained more than 1 percent each.
Netflix was the biggest mover in the S&P 500 after reporting in-line quarterly earnings and higher-than-expected subscriber growth.
“The fact that Netflix is reacting so well to earnings helps the market,” said Tom Martin, senior portfolio manager at Globalt. “Netflix is a bellwether stock.”
UnitedHealth shares rose 3 percent after it reported better-than-expected earnings and raised its outlook for 2018.
Goldman Sachs posted better-than-expected earnings and revenue for the first quarter, boosted by a 38 percent jump in equities trading revenue. The stock fell more than 1 percent after opening higher.
Johnson & Johnson posted a profit that surpassed estimates, boosted by a strong performance by its pharmaceuticals segment. Johnson & Johnson jumped higher at the open but slipped more than 1 percent in midday trading.
IBM, CSX and United Continental are among the companies set to report Tuesday after the close.
“The Q1 earnings season has started solidly,” said Jeremy Klein, chief market strategist at FBN Securities. “Corporate executives have not only easily beaten extremely aggressive top and bottom line estimates in aggregate but have also spoken effusively about their business prospects. Nothing matters more for the health of the rally than the ability of companies to churn out profits.”
Wall Street has high expectations for this earnings season, with analysts expecting a 17.3 percent increase in first-quarter earnings, according to FactSet.
The moves Tuesday come after a strong Wall Street finish on Monday, with the Dow Jones industrial average closing up more than 200 points. U.S. markets received a boost Monday, as fears of an escalating conflict in Syria eased temporarily.
Last weekend, the U.S. military conducted missile strikes against the Syrian government, in response to a suspected chemical attack that took place in the Middle Eastern country. The strike carried out by the U.S. was done in collaboration with Britain and France.
On the economic data front, housing starts rebounded in March, totaling 1.319 million versus a Reuters estimate of 1.262 million.