U.S. stocks rose on Thursday on the back of strong earnings from Netflix and Morgan Stanley, with Britain’s preliminary last-minute deal with the European Union adding to the upbeat mood.
British Prime Minister Boris Johnson said “we have a great new Brexit deal”, although he still faces a tough vote in parliament on Saturday.
More than a tenth of the companies in the S&P 500 have reported results so far and numbers are mostly coming in ahead of analysts’ expectations. That gave the stock market some support a day after weak retail sales data raised concerns that a major component of the economy, American consumers, were slowing their spending.
Netflix Inc shares rose 3.6% after the video streaming service provider added slightly more paying subscribers than Wall Street’s expectations in the third quarter.
The stock helped the communication services sector rose by 0.7%. The S&P 500 and Nasdaq indexes touched near one-month highs earlier in the day.
Morgan Stanley climbed 3% after the bank beat analysts’ expectations for quarterly profit, wrapping up strong earnings from major U.S. lenders including JPMorgan Chase & Co, Citigroup Inc and Bank of America.
Supporting sentiment was White House economic adviser Larry Kudlow’s comments that he sees momentum to finalize the initial phase of a U.S.-China trade deal outlined last week, adding it may be signed at the APEC forum next month.
Rising uncertainties around the trade war, increasing geopolitical risks, and weak domestic economic indicators have been a concern for investors.
In the latest sign, data showed U.S. homebuilding tumbled from a more than a 12-year high in September, while another report showed a deceleration in factory activity in the mid-Atlantic region in October.
The third-quarter earnings season is expected to see its first year-on-year contraction since 2016, with analysts estimating a 2.9% drop in S&P 500 earnings.
Of the 63 S&P 500 companies to have posted quarterly results so far, 82.5% have beaten estimates.
At 1:05 p.m. ET the Dow Jones Industrial Average was up 20.27 points, or 0.08%, at 27,022.25, the S&P 500 was up 9.40 points, or 0.31%, at 2,999.09 and the Nasdaq Composite was up 26.70 points, or 0.33%, at 8,150.88.
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