U.S. stocks moved higher again Tuesday, taking both the Dow and the S&P 500 to fresh record highs, as earnings continue to power market performance in the face of surging energy prices and inflation prospects.
Tesla's (TSLA) - Get Tesla Inc Report breach of the $1 trillion market value barrier yesterday, as well as a stronger-than-expected start to a busy week for U.S. corporate earnings, lifted the S&P 500 to a fresh record close, while oil prices and bank stocks helped push the Dow to its latest all-time closing peak.
Earnings will take center-stage again Tuesday, with pre-market updates from General Electric (GE) - Get General Electric Company Report, 3M (MMM) - Get 3M Company Report, Eli Lilly (LLY) - Get Eli Lilly and Company Report, and United Parcel Service UPS -- all of which topped Street forecasts -- with Microsoft (MSFT) - Get Microsoft Corporation Report, Twitter (TWTR) - Get Twitter, Inc. Report, and Advanced Micro Devices (AMD) - Get Advanced Micro Devices, Inc. Report following after the bell.
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, with a beat rate -- or the level at which companies top Street forecasts -- that near to the highest levels on record.
Still, inflation prospects continue to linger, with a market-based inflation gauge of five-year inflation trading at the highest levels since January 2004 while the Fed's preferred inflation benchmark, the core PCE price index, sped to the fastest pace in 30 years last month.
Curiously, Tesla founder and CEO Elon Musk found time to weigh in on the inflation debate yesterday -- while possibly celebrating his lead as the world's richest man --- with star fund manager Cathie Wood.
Wood, who runs the Ark Investment Management group -- which includes the ARK innovation ETF (ARKK) - Get ARK Innovation ETF Report -- is a vocal Tesla proponent and one of its most important investors. She has also advance the argument that technical innovation, including advancements in AI and blockchain technology, will "bend" the inflation curve in the years ahead, slowing price increases and potentially trigger a period of global deflation.
Musk replied to Wood's comments through his verified Twitter account by noting that "I don't know about the long-term, but short-term we are seeing strong inflationary pressure.
On Wall Street,the Dow Jones Industrial Average gained 125 points in the opening hour of trading, while the broader S&P 500 was up 22 points.
The tech-focused Nasdaq Composite gained 140 point advance as benchmark 10-year Treasury note yields edged higher, to 1.652%, ahead of a $60 billion auction of 2-year notes later in the session.
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General Electric shares were active in early trading, rising 3% after posting stronger-than-expected third quarter earnings and lifting its full-year profit outlook amid what it called a "challenging operating environment" and "global supply chain disruptions".
3M was also on the move, but edged only 0.5% higher despite better-than-expected third quarter earnings, and an improved 2021 sales outlook despite, amid "continued global challenges" and supply chain disruptions.
UPS jumped 7.25% after better-than-expected third-quarter earnings amid ongoing demand for e-commerce-related package deliveries that continue to be a driving force behind the economy’s rebound.
Habro (HAS) - Get Hasbro, Inc. Report, too, impressed with stronger-than-expected third-quarter earnings as its recent focus on digital gaming and entertainment continues to add to the toymaker's top and bottom lines. Shares in the group rose 5.3% in early dealing.
Facebook (FB) - Get Meta Platforms Inc. Class A Report shares fell 1.65% after the social media giant posted a mixed set of third quarter earnings while unveiling plans to report profits from its "metaverse" project as a separate division in the years ahead.
Founder and CEO Mark Zuckerberg also pushed back at the recent stream of allegations raised against the group, including by high-profile whistleblower Frances Haugen, calling the idea that Facebooks pushes divisive content "deeply illogical".
DraftKings (DKNG) - Get DraftKings Inc Class A Report surged 6.6% to $50.50 each after the online sports betting group scrapped its $22.4 billion takeover bid for British bookmaker Entain.
In overseas markets, Europe's Stoxx 600 rose 0.75% to a fresh seven-week high after a series of stronger-than-expected bluechip earnings -- including from investment banking giant UBS -- offset reports that Germany will trim its 2021 GDP growth forecast to 2.6% as supply chain disruptions, record-high energy prices and a shortage in global semiconductor supplies hit manufacturing capacity in the region's biggest economy.
Oil prices were back on the march, as well, with WTI futures for December delivery rising 32 cents from Monday's close to change hands at $84.11 per barrel ahead of American Petroleum Institute data on domestic stockpiles later in the session.