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While you were sleeping: UPDATED Strong earnings lift US stocks

Netflix led the gainers with a 19% share price rise. 

Margreet Dietz
Wed, 19 Oct 2016

Wall Street climbed as companies including UnitedHealth and Goldman Sachs reported earnings that beat expectations, bolstering confidence about valuations.

At the close, the Dow Jones Industrial Average was up 75.54 points, or 0.4%, to 18,161.94. The Nasdaq Composite Index rose 0.8% to 5243.84 and the Standard & Poor's 500 Index increased 0.6% to 2139.60.

"We've been selling off for the better part of a week at this point and earnings have been good enough to get us into this bounce," Milwaukee-based Robert W Baird & Co institutional equity sales trader and managing director Michael Antonelli told Bloomberg.

The Dow gained, propelled higher by gains in UnitedHealth Goldman Sachs shares, trading 6.9% and 2.2% stronger respectively.

UnitedHealth upgraded its outlook for 2016 net earnings.

"Our growth indicators are positive as we conclude 2016, and we expect to be well positioned in 2017 to better serve consumers and deliver more value to the health system overall," chief executive Stephen Hemsley says.

Netflix shares soared, trading 19% higher after it reported an increase in the number of subscribers that far exceeded analysts' estimates.

"Netflix showed that the qualitative virtues often cited by the bulls-secular growth of internet video, global scale, a commitment to quality content, and singular focus could drive robust subscriber growth even in the face of well-documented headwinds," Nomura Securities analyst Anthony DiClemente told clients.

Domino's exceeds expectations
Shares of Domino's Pizza jumped 7.3% after it posted third-quarter earnings that exceeded expectations.

Domestic same-store sales grew 13.0% during the quarter versus the year-ago period, which represents the 22nd consecutive quarter of positive sales in the US business, the Ann Arbor company says.

"Domino's posted the best Q2 domestic same-store sales growth of the 25 largest restaurant chains in the US-and now looks poised to do so again in Q3, likely by a wide margin," Nomura restaurant analyst Mark Kalinowski says, according to Reuters.

Bucking the trend were IBM and Johnson & Johnson shares, both down 2.6%.

IBM's stock slid after the company reported its 18th consecutive drop in quarterly revenue.

Meanwhile, a Labor Department report showed that the consumer price index rose 0.3% in September from the previous month, up from a 0.2% increase in the previous month. It underpinned bets that the US Federal Reserve will raise its key interest rate at its December meeting.

"The upward creep of prices weakens any argument against a rate increase in December," New York-based Miller Tabak chief economic strategist Anthony Karydakis told Reuters.

"The economy is close to full employment and prices are starting to respond to that reality."

In Europe, the Stoxx 600 Index ended the day with a drop of 0.7%. The UK's FTSE 100 Index rose 0.8%, Germany's DAX Index advanced 1.2%, while France's CAC 40 Index rose 1.3%.


Margreet Dietz
Wed, 19 Oct 2016
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While you were sleeping: UPDATED Strong earnings lift US stocks