Stocks rose on Friday amid solid
corporate earnings as Wall Street tried to rebound from steep losses in the
previous session.
The Dow Jones Industrial
Average rose 224 points, led by sharp gains in Procter & Gamble.
The S&P 500
gained 1 percent as the consumer staples and technology sectors outperformed.
The Nasdaq Composite
outperformed, climbing 1.3 percent.
Dow-member Procter & Gamble posted
better-than-expected earnings, sending the stock up 7.7 percent. The
company said it got a boost from strong beauty-product sales. Honeywell and
Schlumberger also reported better-than-forecast profits.
"The underpinnings of the
economy are still in place and earnings are still good," said Quincy
Krosby, chief market strategist at Prudential Financial. "The market is
not going to have an immediate recovery; it tends to bounce."
American Express, PayPal and
Skechers all posted on Thursday earnings that topped analyst expectations.
Their shares rose 2.6 percent, 9.3 percent and 15.4 percent, respectively.
The corporate earnings season is off
to a strong start. With more than 15 percent of S&P 500 companies having
reported, 83 percent have topped analyst expectations, according to FactSet.
These moves follow a sell-off on in
the previous session as investors worried about rising rates, geopolitical
tensions and a potential slowdown in the global economy. On Thursday, the Dow dropped
more than 300 points, following a plunge in Chinese equities. History shows
that, when stocks plunge in China, the U.S. market is rarely immune as
large exporters suffer.
Overnight, China said its economy
grew by 6.5
percent in the third quarter, missing expectations. Chinese equities
surged, however, as officials took
steps to support the market, and that was helping sentiment in the
U.S.
Despite Friday's gains, however,
stocks remain down sharply for the month. The Dow and S&P 500 have fallen
more than 4 percent each in October, while the Nasdaq is down nearly 7 percent.
"This whole thing started a few
weeks ago when [Federal Reserve] Chairman Jerome Powell said we're a long way
from neutral," said Brent Schutte, chief investment strategist for
Northwestern Mutual Wealth Management. "What we're seeing here is a good
old fashion valuation repricing."
Schutte added these recent pullback
is a buying opportunity for investors.
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