As has been the pattern for quite some time now, the market bounced back big time today as the concern over the flattening yield curve took a backseat to the gushing Q3 reports which has almost half of the S&P in with 82% beating estimates and the earnings growth forecast now raised to 38.6 percent. All three indexes got a big boost with the Dow gaining back almost as much as it lost yesterday.  One thing boosting confidence is the new consensus that Biden’s bill would not boost corporate taxes as much as feared.  Volume remains above average at just over 11 billion. 

Thu  October 28, 2021  6:44 PM

S&P, Nasdaq hit record closing highs on earnings bullishness

By Chuck Mikolajczak and Sinéad Carew

DJ: 35,490.69  -266.19       NAS: 15,235.84  +0.12         S&P: 4,551.68  -23.11      10/27

DJ: 35,730.48  +239.79      NAS: 15,448.12  +212.28     S&P: 4,596.42  +44.74     10/28

NEW YORK, Oct 28 (Reuters) - Wall Street closed higher on Thursday, with the S&P 500 and Nasdaq boasting record closing levels thanks partly to gains in Apple and Amazon, while solid results from companies including Caterpillar and Merck helped ease concerns about slowing economic growth denting profits.  After the bell, however, shares of both Amazon.com Inc (AMZN.O) and Apple Inc (AAPL.O) moved sharply lower following the release of quarterly results.  Amazon was down 4% in extended trading after forecasting holiday-quarter sales below Wall Street expectations. read more Apple fell more than 3% in late trading after it said supply-chain woes cost it $6 billion in sales in the last quarter and that the impact will be even worse in the holiday-sales quarter.  During the regular session, heavyweights including Tesla Inc (TSLA.O), finishing up 3.8%, and Apple, which closed up 2.5%, spurred on the Nasdaq and the S&P.

The S&P was also boosted by Caterpillar Inc (CAT.N), which closed up 4% after reporting a better-than-expected quarterly profit on rising commodity prices and a bullish forecast from drugmaker Merck & Co Inc (MRK.N), which added 6%. read more  Investors also eyed Washington, where President Joe Biden said he had secured a new $1.75 trillion framework for economic and climate change spending. read more  "Earnings continue to be very good," said Bill Stone, chief investment officer at the Glenview Trust Co in Louisville, Kentucky, who also noted that Biden's framework, if it succeeds, would not boost corporate taxes as investors had previously feared.  "Underneath the surface, that's a positive for corporate earnings" going forward, said Stone.

The Dow Jones Industrial Average (.DJI) closed up 239.79 points, or 0.68%, at 35,730.48, the S&P 500 (.SPX) gained 44.74 points, or 0.98%, to 4,596.42 and the Nasdaq Composite (.IXIC) added 212.28 points, or 1.39%, to 15,448.12.  All 11 major S&P sectors closed higher, with Real Estate (.SPLRCR), consumer discretionary (.SPLRCD), and industrials (.SPLRCI) leading the gains.

Solid earnings also helped offset a report from the Commerce Department which showed the U.S. economy grew at a 2% annualized rate in the third quarter as COVID-19 infections flared up, short of the 2.7% estimate, while another set of data showed fewer Americans filed new claims for unemployment benefits last week as the labor market slowly improves. read more  "Clearly we are seeing a large batch of macroeconomic data that has been coming through during the middle of third-quarter earnings reporting season and you are seeing a little bit of a tug-of-war that exists between macroeconomic data that is appearing to be somewhat softer at the margin and corporate performance which is proving to be better than expectations," said Bill Northey, senior investment director at U.S. Bank Wealth Management in Minneapolis.

Earnings reports have helped advance in the benchmark S&P index in 10 of the previous 12 sessions, with analysts now expecting profits for S&P 500 companies to grow 38.6% year-on-year in the third quarter.  Of the 244 S&P 500 companies that had reported by Thursday morning, 82% had beaten estimates.  However EBay Inc (EBAY.O) shares finished down 6.8% after the e-commerce firm forecast downbeat holiday-quarter revenue. read more 

Advancing issues outnumbered declining ones on the NYSE by a 2.15-to-1 ratio; on Nasdaq, a 2.46-to-1 ratio favored advancers.  The S&P 500 posted 34 new 52-week highs and 4 new lows; the Nasdaq Composite recorded 104 new highs and 96 new lows.

On U.S. exchanges 11.05 billion shares changed hands compared with the 10.34 billion moving average for the last 20 sessions.