4:23pm: Monday brings welcome relief
The Dow closed Monday up 314 points, 0.9%, at 33,985, the Nasdaq Composite added 161 points, 1.2%, to 1,568 and the S&P 500 improved 46 points, 1.1%, to 4,374. The small-cap Russell 2000 index gained 27 points, 1.6%, to 1,747.
Investor sentiment is shifting away from the Israel-Hamas war and toward earnings season, according to Lisa Erickson, senior vice president at US Bank Wealth Management.
“I really see a relief rally going on,” Erickson said. “Sentiment has just turned relatively more positive.”
12:00pm: Earnings and Middle East hopes lift equities
US stocks accelerated on Monday amid hopes that a diplomatic push might limit the crisis in the Middle East and ahead of a bumper batch of US earnings this week.
At midday, the Dow Jones Industrial Average was up 349.43 points, 1.0%, at 34,019.72, the S&P 500 was up 44.48 points, 1.0%, at 4,372.26 and the Nasdaq Composite was up 128.95 points, 1.0%, at 13,536.18.
Reports suggested US President Joe Biden is considering a trip to Israel as part of a global diplomatic push to prevent the war from spreading in the Middle East.
Meanwhile, US Secretary of State Antony Blinken also returned to Israel to meet Prime Minister Benjamin Netanyahu, after talks with Arab officials, and German Chancellor Olaf Scholz is preparing for a visit Tuesday.
Chris Beauchamp, chief market analyst at online trading platform IG said: "Last week’s fears about higher inflation driving renewed Fed rate hikes seem to have dissipated, especially given the low probability of a move in November. Bulls will be encouraged by tech stocks taking the lead this afternoon, with the Nasdaq 100 feeling more confident ahead of Netflix’s earnings later in the week.”
9:45am: Bright start on Wall Street
US stocks pushed ahead in early exchanges ahead of a busy week of US earnings.
Shortly after the opening bell, the Dow Jones Industrial Average was up 229.40 points, 0.7%, at 33,899.69, the S&P 500 was up 24.15 points, 0.6%, at 4,351.93 and the Nasdaq Composite was up 85.66 points, 0.6%, at 13,492.89.
Investors were closely monitoring diplomatic efforts in the Middle East in the hope that a further escalation of the crisis could be avoided.
US President Joe Biden is considering a trip to Israel as part of a global diplomatic push to prevent the war from spreading in the Middle East.
Efforts also saw US Secretary of State Antony Blinken return to Israel Monday, following talks with Arab officials, and German Chancellor Olaf Scholz prepare for a visit Tuesday.
In company news, Charles Schwab (NYSE:SCHW) was little moved by its results which saw revenue slightly below expectations and earnings above.
The firm said it had also found $1 billion of annual cost savings.
Pfizer jumped 3.0% despite scaled back its earnings outlook for the year on Friday, blaming lower-than-expected sales of two drugs used to treat Covid-19.
The US pharmaceutical company now "anticipates full-year 2023 revenues to be in the range of $58.0 to $61.0 billion, versus its previous guidance range of $67.0 to $70.0 billion," it said.
Earnings per share should come in at between 1.45 and 1.65 dollars, compared with 3.25 to 3.45 dollars previously anticipated.
The cut to Pfizer's guidance was "solely due to its Covid products," the company said.
Jefferies upgraded the stock to buy.
Another stock on the move was lululemon Athletica, up 7.8%.
The athleisure company will be added to the S&P 500 on Wednesday, according to S&P Dow Jones Indices.
Lululemon will replace Activision Blizzard following the completion of its takeover by Microsoft.
7:00am: US stocks set to start the week on the front foot
US stocks are expected to open broadly higher on Monday as investors look ahead to a bumper week of earnings updates.
In pre-market trading, futures for the Dow Jones Industrial Average were 0.3% higher, while those for the S&P 500 rose 0.2%, and contracts for the Nasdaq 100 futures were down 0.1%.
The earnings season heats up this week with 11% of the S&P 500 slated to report results, including Johnson & Johnson (NYSE:JNJ), Bank of America, Netflix and Tesla.
Today, Charles Schwab (NYSE:SCHW) will report results before the opening bell.
Trading will take place against a backdrop of ongoing uncertainty in the Middle East as the conflict shows signs of escalating.
Elsewhere, a top Federal Reserve official said it is “undeniable” that the slowdown in US inflation is a trend rather than a momentary blip, despite a recent string of economic data showing persistent pressure on some prices.
Speaking to the Financial Times, Austan Goolsbee, president of the Chicago Fed, denied that progress was stalling on getting inflation back to the US central bank’s 2%.
He cautioned against tying forthcoming monetary policy decisions to a narrow set of data.
“There is a lot saying that inflation is trending down compared with what it has been and that’s what we want,” he said.
“It’s undeniable this is a trend. It wasn’t a one-month blip . . . we have to hope and keep an eye out to make sure that continues.”