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

Spirit Realty Capital

30/10/2023 20:17

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        * 
      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 
    

        * 
      Indexes up: Dow 1.58%, S&P 1.20%, Nasdaq 1.16%
    

  
 (Updates to 16:10 EDT)
    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, led by Microsoft Corp  MSFT ,
Amazon.com  AMZN.O , and Apple Inc  AAPL.O   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.
    The Dow Jones Industrial Average  .DJI  rose 511.37 points,
or 1.58%, to 32,928.96, the S&P 500  .SPX  gained 49.45 points,
or 1.20%, to 4,166.82 and the Nasdaq Composite  .IXIC  added
146.47 points, or 1.16%, to 12,789.48.
        All 11 major sectors of the S&P 500 ended the session
green, with communication services  .SPLRCL  enjoying the
biggest percentage gain, jumping 2.1%.
  
        McDonald's  MCD.N  
    reported
     better than expected quarterly results, driven by demand
for its more affordable food as consumers contend with ongoing
inflation pressures. Its shares gained 
    1.7
    %.
  
        Onsemi  ON.O  tumbled 
    21.8
    % after the chipmaker 
    forecast
     weak fourth-quarter revenue on slowing demand for electric
vehicles.
  
        Western Digital Corp  WDC.O  jumped 
    7.3
    % after the company 
    disclosed
     plans to separate itself into two independent public
companies.
  
        Realty Income  O.N  slid 
    5.7
    % 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
advanced 
    7.9
    %.
  
        Advancing issues outnumbered declining ones on the NYSE
by a 2.15-to-1 ratio; on Nasdaq, a 1.62-to-1 ratio favored
advancers.
  
        The S&P 500 posted no new 52-week highs and 44 new lows;
the Nasdaq Composite recorded 14 new highs and 363 new lows.  
  
        Volume on U.S. exchanges was 10.16 billion shares,
compared with the 10.67 billion average for the full session
over the last 20 trading days.    
  

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S&P 500 down 10% from year's high    https://tmsnrt.rs/3FE4RBq
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 (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;))