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Dow, S&P Extend Closing Records on Strong Earnings

Wall Street posted another pair of records Tuesday as big-ticket earnings continue to impress despite inflation and growth pressures.

The Dow and the S&P 500 posted record high closes Tuesday as earnings continue to power market performance in the face of surging energy prices and inflation prospects.

The Dow Jones Industrial Average finished up 15 points, 0.04%, to 35,756, while the S&P rose 0.18% and the Nasdaq ticked up 0.06%.

The Dow and the S&P also posted intraday highs.

The consumer confidence index increased to a reading of 113.8 this month from 109.8 in September, ending three straight monthly declines. Economists polled by Reuters had forecast that the index would dip to 108.3.

“Consumer confidence improved in October, reversing a three-month downward trend as concerns about the spread of the Delta variant eased,” Lynn Franco, Senior Director of Economic Indicators at The Conference Board, said in a statement. “While short-term inflation concerns rose to a 13-year high, the impact on confidence was muted. 

"The proportion of consumers planning to purchase homes, automobiles, and major appliances all increased in October, Franco said, "a sign that consumer spending will continue to support economic growth through the final months of 2021," Franco said.

With 119 companies reporting so far this earnings season, collective S&P 500 profits are set to rise 34.8% from last year to $430.3 billion, according to data from Refinitiv. The beat rate -- or the level at which companies top Wall Street forecasts -- is near the highest levels on record.

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Bank of America’s long-term stock valuation model, using a price-to-normalized earnings ratio, indicates a negative 10-year return for the S&P 500 for the first time since 1999.

“Price-to-normalized earnings has a very strong relationship to subsequent S&P 500 returns over the long haul,” Bank of America analysts, led by Savita Subramanian, wrote in a commentary.

General Electric  (GE) - Get General Electric Company (GE) Report rose after posting stronger-than-expected third quarter earnings and lifted its full-year profit outlook. But the group narrowed its industrial cash flow forecast amid what it called a "challenging operating environment" and "global supply chain disruptions". 

Lockheed Martin  (LMT) - Get Lockheed Martin Corporation (LMT) Report ended lower after the company posted better-than-expected third-quarter earnings but sales that fell short of forecasts. The report reflected a drop in revenue in its aeronautics division due to a decline in F-35 jet sales.

Two stocks associated with former President Donald Trump, Digital World Association  (DWACU) - Get Digital World Acquisition Corp. Report and Phunware  (PHUN) - Get Phunware, Inc. Report, tumbled after posting massive gains last week.

DWAC, a special purpose acquisition company, is merging with the newly formed Trump Media & Technology Group.

Phunware jumped on speculation that the company was being tapped to build former President Donald Trump’s proposed social media platform.