US STOCKS-Wall Street ends sharply higher, powered by earnings momentum; Fed eyed

Spirit Realty Capital

30/10/2023 20:00

(For a Reuters live blog on U.S., UK and European stock
markets, click LIVE/ or type LIVE/ in a news window.)

        * 
      McDonald's rises after beating Q3 estimates
    

        * 
      Western Digital jumps on plan to separate into two cos
    

        * 
      Onsemi slips on dour Q4 rev forecast
    

        * 
      Fed meet, jobs data in focus 
    

  
 (Updates to market close)
    By Stephen Culp
       NEW YORK, Oct 30 (Reuters) - 
    Wall Street rallied on Monday, kicking off what promises to
be a hectic week that includes a heavy earnings docket, economic
data and the Federal Reserve's two-day monetary policy meeting.
  
        All three major U.S. stock indexes closed up more than
1%, bouncing back from the previous week's sell-off. Interest
rate sensitive megacap stocks provided the most upside muscle.
  
        "Today is an earnings rebound," said Oliver Pursche,
senior vice president at Wealthspire Advisors, in New York. "The
market got oversold, and the reality is that earnings have been
pretty good, the U.S. economy continues to chug along, and is
likely to do so in the fourth quarter and into the first part of
next year."
  
    Third-quarter earnings season, firing on all cylinders, has
reached its halfway point, with 251 of the companies in the S&P
500 having reported. Of those, 78% have beaten Wall Street
estimates, according to LSEG.
    Analysts now expect, on aggregate, annual third quarter S&P
500 earnings growth of 4.3%, a marked improvement over the 1.6%
year-on-year growth seen at the beginning of October.
        Investors have shown “less pessimism," Pursche added.
"First- and second-quarter calls had a more negative tone. There
was anxiety over interest rates, Fed policy, the recession that
never came."
  
    In the coming week, Caterpillar Inc  CAT.N , Apple Inc
 AAPL.OO , Pfizer Inc  PFE.N  and Starbucks Corp  SBUX.O  are
among the higher profile companies expected to post results.
    On Tuesday, the Federal Open Markets Committee (FOMC) is
expected to convene for a two-day monetary policy meeting, which
is expected to culminate in a decision to let the Fed funds
target rate stand at 5.25%-5.50%.
    Investors will scrutinize the accompanying statement and Fed
Chair Jerome Powell's subsequent Q&A session for clues regarding
the central bank's path forward with rates.
        "The Fed wants to see the cumulative effects of their
rate hikes on the economy but they’ve also said they’re prepared
to over-shoot in an abundance of caution, as long as inflation
is above 3%," Pursche said.
  
    The Bank of England and the Bank of Japan would also be
announcing rate decisions this week, with the latter set to
consider a further adjustment to its yield curve control (YCC)
framework, according to a Nikkei report.
    Closely watched economic data is on tap this week,
culminating in the U.S. Labor Department's October employment
report due on Friday.
    Geopolitical strife arising from the Israel-Hamas conflict
as well as a surge in Treasury yields have weighed on stocks in
recent weeks, dragging the benchmark S&P 500  .SPX  down about
10% from its intraday high in July.
    
    According to preliminary data, the S&P 500
 .SPX  gained 49.19 points, or 1.19%, to end at 4,166.56 points,
while the Nasdaq Composite  .IXIC  gained 143.74 points, or
1.14%, to 12,786.75. The Dow Jones Industrial Average
 .DJI  rose 512.02 points, or 1.58%, to 32,927.51.
    McDonald's  MCD.N  reported better than expected quarterly
results, driven by demand for its more affordable food as
consumers contend with inflation. 
    Onsemi  ON.O  tumbled after the chipmaker forecast weak
fourth-quarter revenue on slowing demand for electric vehicles.
    Western Digital Corp  WDC.O  jumped after the company
disclosed plans to separate itself into two independent public
companies.
    Realty Income  O.N  slid following its announcement that it
would by Spirit Realty Capital  SRC.N  in an all-stock deal
valued at $9.3 billion. Spirit Realty Capital shares jumped.

    <^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
S&P 500 down 10% from year's high    https://tmsnrt.rs/3FE4RBq
    ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^>
 (Reporting by Stephen Culp; Additional reporting by Amruta
Khandekar and Shashwat Chauhan in Bengaluru; Editing by David
Gregorio)
 ((stephen.culp@thomsonreuters.com; 646-223-6076;))