Stocks rise, Dow jumps 200 points as Wall Street tries to shakes off slow start to the week


U.S. stocks rose on Tuesday as investors digested another batch of corporate earnings and awaited key inflation data later this week.

The Dow Jones Industrial Average gained 200 points, or about 0.6%. The S&P 500 ticked up 0.3%, while the Nasdaq Composite added roughly 0.6%.

Corporate earnings were driving stock moves on Tuesday. Harley-Davidson jumped 8% after the company reported a surprise profit for the fourth quarter. Amgen and Chegg also rose following quarterly updates.

Shares of American Express and JPMorgan each rose more than 1%, boosting the Dow.

“Now that we are both over the hump with earnings season and investors are prepared for another hot inflation report, the ongoing rotation trade will likely continue. Today, traders are finding value in tech and embracing financials as global bond yields steadily increase,” Edward Moya, senior market analyst at Oanda, said in a note to clients.

However, Pfizer shares tumbled 3.6% after the drugmaker’s fourth-quarter revenue came in lower than Wall Street analysts expected. Pfizer’s full-year earnings guidance also disappointed.

As of Tuesday morning, about 300 S&P 500 components have reported, with 77% exceeding earnings estimates and 75% topping revenue expectations, according to FactSet. However, the strong results have not been enough to dig the market out of the hole created by January’s slide, and weak forward guidance may be part of what is holding back a rebound.

“Despite a solid beat this quarter, guidance weakened significantly. … Guidance is also sparser than usual – we note only 76 instances of EPS guidance issuance in [January], slightly below last Jan and the lowest of any Jan,” Bank of America’s Savita Subramanian said in a note to clients.

Elsewhere, Peloton shares rose 18% after the interactive fitness company said it will slash 2,800 jobs in a restructuring effort that will see CEO John Foley step down and transition to executive chair.

The company will report earnings Tuesday after the market closes and during what’s been a turbulent time for the company. The stock surged 20.9% on Monday following reports the company could be a takeover target.

Shares of Snap, which have been volatile during a mixed earnings season for social media stocks, fell 4.7% after the social media company announced a new debt offering.

Wall Street is on edge watching how the Federal Reserve will react to the intensifying price pressures. Bank of America on Monday reiterated its call for the Fed to hike rates 1.75 percentage points, or seven times, this year in an effort to head off inflation pressures which may have been accelerated by rising wages.

Treasury yields hit fresh pandemic-era highs Monday and rose again Tuesday. The benchmark 10-year Treasury note most recently yielded 1.96%, a level not seen since November 2019.

On Thursday the Labor Department will release January’s consumer price index data. The reading follows a stronger-than-expected January jobs report, which has led to speculation that the Federal Reserve could be more aggressive when it comes to hiking rates. The inflation data is expected to show that prices rose 0.4% in January, for a 7.2% gain from one year ago, which would be the highest in almost 40 years.

On the economic data front, the Census Bureau said Tuesday that December’s trade balance was a deficit of $80.7 billion. Economists surveyed by Dow Jones survey were expecting a shortfall of $82.8 billion.

Tuesday’s market moves clawed back much of Monday’s losses for the S&P 500 and Nasdaq, which are now roughly flat for the week while the Dow is slightly higher.

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