By Medha Singh and Shivani Kumaresan
(Reuters) – Wall Street gained on Friday as Disney and Cisco’s upbeat results brought the focus back to corporate earnings at the end of a volatile trading week that saw record surges in coronavirus cases and increased hopes of a working vaccine.
Cisco Systems Inc led gainers among the S&P 500 and the Dow, helping the two indexes rise about 1% each.
The network gear maker jumped 6.7% as it gained from a work-from-home driven surge in demand, while Walt Disney Co rose 2% as its rapidly growing streaming video business, and a partial recovery at its theme parks limited its quarterly loss.
“We are finishing an extremely strong earnings season with an exclamation point on Disney’s impressive earnings,” said Ryan Detrick, senior market strategist at LPL Financial in Charlotte, North Carolina.
The third-quarter earnings season is in its final stretch with about 90% of S&P 500 companies having reported so far, according to Refinitiv IBES data. Overall profit is expected to fall 7.8% from last year, a significant improvement from a 21.4% slump forecast on Oct. 1.
The three major U.S. stock indexes fell on Thursday as U.S. coronavirus cases jumped and investors weighed how fast an effective vaccine would be rolled out.
More than a dozen U.S. states reported a doubling of new COVID-19 cases in the last two weeks, with Chicago’s mayor issuing a month-long stay-at-home advisory on Thursday.
Positive early data from a large vaccine study earlier this week prompted a rotation into sectors that usually benefit from an upswing in the economy, such as financial and energy stocks, putting the S&P 500 and Dow on track for weekly gains.
The tech-heavy Nasdaq, however, is headed for a weekly decline as investors booked profits in market-leading technology stocks, which have benefited from a stay-at-home environment.
“Investors are still balancing between belief that value trade will work, but growth trade will still make a lot of sense with high quality companies because of the COVID murkiness still around,” said Andrew Smith, chief investment strategist at Delos Capital Advisors in Dallas.
Meanwhile, President-elect Joe Biden’s victory in the battleground state of Arizona expanded his electoral vote margin, but the official transition remains in limbo as President Donald Trump refuses to concede.
At 12:00 p.m. ET the Dow Jones Industrial Average rose 285.78 points, or 0.98%, to 29,364.80, the S&P 500 gained 31.72 points, or 0.90%, to 3,568.73 and the Nasdaq Composite gained 71.46 points, or 0.61%, to 11,781.05.
Growth stocks, currently largely comprised of tech companies, edged 0.3% higher, while value names, which currently include mostly cyclical stocks such as banks and energy, advanced 1.4%.
All major S&P sectors were higher with materials, industrials and energy posting the sharpest gains.
Advancing issues outnumbered declining ones on the NYSE by a 4.3-to-1 ratio, while a 2.4-to-1 ratio favored advancers on the Nasdaq.
The S&P 500 posted five new 52-week highs and no new low, and the Nasdaq Composite recorded 75 new highs and 15 new lows.
(Reporting by Medha Singh and Shivani Kumaresan in Bengaluru; Editing by Saumyadeb Chakrabarty and Shounak Dasgupta)
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