US stock indexes have edged higher helped by strong quarterly updates from healthcare companies including Anthem and Abbott, while worries remain about the impact of supply chain constraints and inflation on corporate earnings.
Abbott Laboratories rose 4.2 per cent after raising its full-year profit forecast on a rebound in COVID-19 test sales.
Anthem Inc gained 5.7 per cent and Biogen Inc added two per cent after both healthcare companies raised their full-year profit forecasts.
Eight of the 11 major S&P 500 sector indexes were trading higher, led by healthcare stocks.
Analysts expect S&P 500 earnings to rise 33 per cent from a year earlier, according to Refinitiv data, while keeping a close eye on growth outlook from companies that are faced with rising costs, labour shortages and supply chain disruptions.
“Investors are digesting earnings and the impact of supply chain disruptions on Corporate America,” said Fiona Cincotta, senior financial markets analyst at City Index.
“The latest releases have helped to distract from stagflation fears but have diverted attention towards supply chain bottlenecks which look set to plague Q3 earnings.”
Netflix’s global sensation “Squid Game” helped lure more customers than expected, the world’s largest streaming service said as it predicted a packed line-up would further boost signups through the end of the year.
Its shares, however, fell 2.3 per cent after hitting a record high earlier this month and gaining 18.2 per cent so far this year.
Other mega cap technology and communication names were mixed in pre-market trading. Facebook, up 0.2 per cent, is planning to rebrand itself with new name that focuses on metaverse, according to the Verge.
Tesla Inc edged 0.6 per cent lower in the run up to its quarterly results after markets close, with investors awaiting details on its performance in China.
“People are waiting to see what the large tech companies are going to report. That is probably the real reason we’re seeing individual stocks responding more than the broader market,” said Peter Cardillo, chief market economist at Spartan Capital Securities in New York.
In quarterly reports, Verizon Communications Inc gained 2.1 per cent as it added more postpaid phone subscribers than expected in the third quarter, while oilfield firm Baker Hughes Co slipped four per cent on downbeat profit.
The benchmark S&P 500 index is just 0.3 per cent below its early September record close, while the Dow Jones Industrials average is 0.3 per cent below its all-time high reached in mid-August.
In early trading on Wednesday, the Dow Jones Industrial Average was up 83.61 points, or 0.24 per cent, at 35,540.92, the S&P 500 was up 10.73 points, or 0.24 per cent, at 4,530.36 and the Nasdaq Composite was up 9.87 points, or 0.07 per cent, at 15,138.96.
Ford Motor gained 2.3 per cent after Credit Suisse upgraded the US automaker’s stock to ‘outperform’ on EV transition.
Advancing issues outnumbered decliners by a 1.46-to-1 ratio on the NYSE. Declining issues outnumbered advancers for a 1.01-to-1 ratio on the Nasdaq.
The S&P index recorded 38 new 52-week highs and no new low, while the Nasdaq recorded 48 new highs and 12 new lows.
The Fort News