The stock market gained on Monday after the US Senate passed a major tax, health care and climate bill over the weekend, as investors braced for another busy week of earnings. At least six stocks were breaking out of the base.
The Nasdaq composite gained 0.5% while the S&P 500 rose 0.3%. The Dow Jones Industrial Average gained 0.4%. The small-cap Russell 2000 index gained 1.3%.
Volume rose on the Nasdaq but fell on the NYSE versus the same time on Friday.
The Nasdaq and S&P are starting what could be their fourth straight week. Last week, the Nasdaq closed up 2.1% and the S&P rose 0.4%. The Dow lost 0.1% on the week.
The Dow is on track to close at or above 32,877.66 to break out of correction territory, defined as a 10% decline, according to Dow Jones market data.
Summary of the US Stock Market today
|Dow Jones||(0 MONEY)||32939.22||+135.75||+0.41|
Last updated: 12:02 PM ET 8/8/2022
of The Senate passed a bill on Sunday, with a dissenting vote cast by Vice President Kamala Harris, spending hundreds of billions of dollars on climate and health care programs while raising taxes on large, profitable companies. The legislation offers tax incentives for reducing carbon emissions, seeks to allow Medicare to negotiate the price of some prescription drugs, allocates roughly $80 billion to the Internal Revenue Service and expands health insurance subsidies under the Affordable Care Act. The House of Representatives is expected to consider the bill on Friday.
The week starts with mixed earnings results
of last earnings season is not doing as badly as thought, helping fuel the market’s recent recovery, according to Yardeni Research. As of midweek, 356 (or 71%) of the S&P 500 companies had reported second quarter results. Revenue beat consensus estimates by 2.5%. Earnings beat estimates by 5.6%. So far, 68% of Q2 reporters have reported a positive earnings surprise, while 77% have exceeded earnings forecasts.
To kick off Q2 earnings week, Tyson Foods (TSN) reported quarterly sales rose 8%, but rising costs wiped out any profit growth. Shares fell 9% on Monday morning. The maker of chicken and other packaged meats had revenue of $13.5 billion. Analysts polled by FactSet had expected $13.31 billion in sales. Profit was unchanged from a year ago, amid rising costs for wages, animal feed and transport.
Palantir Technologies (PLTR) on Monday Earnings reported for the June quarter that missed views, while earnings beat Wall Street targets. PLTR shares fell 12% after revenue guidance fell short of expectations
New breakouts for the stock market
In other news, Pfizer (PFE) officially announced on Monday that it has agreed to buy Global blood therapeutics (GWh) for 5.4 billion dollars. Pfizer said Monday it will pay $68.50 a share in cash for Global Blood Therapeutics, which has one of the few approved treatments for sickle cell disease.
Rumors of the deal first surfaced on Friday, sending GBT shares up 26%. On Monday, GBT shares traded more than 4% higher, while PFE shares traded slightly higher.
Meanwhile. some stocks were breaking out of the base on Monday. Brazilian oil (PBRA), Brazil’s state-owned oil company, broke out of the cup base with a buy point of 13.70.
Manufacturer of construction products griffin (GFF) also broke a cup base with a buy point of 31.12 and easily reached near the top of its 5% buy range.
NFE Gas and Energy Infrastructure broke out a cup base with a buy point of 52.47. At a time when energy stocks are not doing well, NFE is one IBD 50 Best Stocks to Watch.
Looking ahead to the stock market
Shares in Asia and Europe rose the most on Monday, with London’s FTSE 100, Germany’s DAX and France’s CAC 40 all advancing. Japan’s Nikkei 224 and Shanghai’s benchmark index also gained, while Hong Kong’s Hang Seng Index fell 0.8%.
The 10-year US Treasury yield rose 10 basis points to 2.78%. Crude oil prices rose 1% to $89.90 a barrel.
Innovator IBD 50 ETF (FFTY) gained 0.1%, lagging the broader market’s gains.
Walt Disney (DIS) will lead another busy week of earnings reports as the stock market grows more optimistic about a soft landing for the US economy. Other strong price performers with earnings coming in They include centigrade (CELH), Aspen Technology (AZPN), Grocery stores (Go) and Shockwave Medical (SWAT).
Follow Michael Molinski on Twitter @IMmolinski
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