U.S. stocks created enough profit on Monday, October 9 to push the Dow Jones Industrial Average and the Nasdaq Composite to brand new records. The push came just a short time before the start of the third-quarter earnings season.
The fiscal 2018 blueprint approved by the U.S. House of Representatives last week should also help boost overall corporate profit.
Speaking of the increase in market values, Managing Director at Janlyn Capital LLC in New Jersey said, “It appears that we have some investors follow-through with optimism on tax cuts and there was no bad news on geopolitical front.”
He added, “Given where we are in the market cycle, any stress in earnings…by companies could become a speed bump.”
On an average, the stock market has managed to remain strong for the better part of the year. This in turn has caused the valuations for many stocks to rise far above their long-term averages, resulting in strong earnings reports.
According to reports, the overall earnings at S&P 500 companies are expected to increase by 4.9% in the third quarter.
This number is down from the double-digit growth witnessed in the first two quarters of the year.
As of 9.43 a.m. EDT the Dow was up by 10.39 points at 22,784.06, the S&P 500 was up by 0.58 points at 2,549.91 and the Nasdaq was up by 6.52 points at 6,596.70.
S&P 500’s eight-day winning streak was interrupted due to weak job numbers, but the Nasdaq still closed on a high for the ninth day in a row.
However, GE fell to 2.8 per cent after it gave Trian Fund Management a board seat. Tesla on the other hand fell to 1.75 per cent after the company postponed the unveiling of a big rig truck to November.
Viacom saw a dip of more than 4 per cent after Citigroup changed the status of the company’s stock to “sell”.
Medtronic dropped by approximately 3 per cent after it declared that its second quarter 2018 earnings and sales would be affected after hurricane Maria.
Viacom slipped more than 4 per cent after Citigroup downgraded the media company’s stock to “sell.”