On Tuesday, US stocks rallied as the S&P was propelled above its 200 day moving average by significant gains in growth-oriented companies, leading the Dow to a triple-digit gain.
Apple Inc.’s upbeat earnings boosted stock prices as did hopes of further stimulus from the European Central Bank. The large jump in Apple shares, Nasdaq Composite and S&P 500’s largest component, assisted in driving the benchmarks higher.
According to Market Watch, the S&P 500 added 1.5% or 29 points to 1,933.06. The benchmark index moved above its key level. The Dow Jones industrial Average gained 1% or 168.13 points to 16,566.23 while the Nasdaq Composite gained 1.7% or 74 points to 4,390.84.
Biotech shares were the largest winners and iShares Nasdaq Biotechnology rose 2.2%.
Apple Inc. shares gained 2.3% after the company reported a rise of 13% in profit, which was aided by the strong demand for its new iPhones. Sales for the iPhone 6 plus and iPhone 6 have assisted the giant to beat the estimates of Wall Street.
Reuters quoted Gradient Investments senior portfolio manager as having said, “Apple gave a good guidance. Any fund manager who is underweight on Apple is probably rethinking that position today.”
Rockwell Global Capital chief market economist, Peter Cardillo said, “ECB reports and corporate earnings are propelling stocks higher, but I think here in the US, basically the market has hit a bottom and earnings are paving the way for a year-end rally which will take us to new records highs.”
Chipmaker Texas Instruments’ shares gained 3.4% to $45.91 after its revenue beat estimates, easing concerns about the weak industry demand after IBM’s results.
Dow components McDonald’s Corp and Coca-Cola Co fell after their results, with currency exchange rates a main concern for them. Coca-Cola dropped 6.2% to $40.61 while McDonald’s dropped 0.5% to $91.15.
Binger said, “The earnings season is kind of average so far, and we’re starting to see the strong dollar hurt stocks like McDonald’s and Coke. The world is a little different because of slowing overseas, but I’d use any pullback as a buying opportunity.”
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