Stocks opened sharply higher on the heels of positive earnings reports from some of the most high-profile names in tech, including Microsoft (MSFT), Tesla (TSLA) and Twitter (TWTR). The market has proceeded to add to its gains throughout the morning and cut into the big losses from yesterday. The Nasdaq is higher by more than 2.5% after having its worst day in six years yesterday. The Dow and S&P are higher today as well, but remain sharply lower for the week.
ECONOMIC EVENTS: In the U.S., initial jobless claims bounced 5,000 to 215,000 in the week ended October 20. Durable goods orders rose 0.8% in September, which was better than expected. The advance goods trade deficit widened to $76.0B in September, hitting a new record. Exports rose 1.8% from last month to $140.9B, while imports were up 1.5% to $217.0B. The pending home sales index increased 0.5% to 104.6 in September, which was better than expected. In Europe, the ECB kept the interest rate on the main refinancing operations and the interest rates on the marginal lending facility and the deposit facility unchanged. The Governing Council also said it expects the key ECB interest rates to remain at their present levels at least through the summer of 2019. The Governing Council anticipates that, subject to incoming data confirming the medium-term inflation outlook, net purchases under the asset purchase program will end in December of this year.
COMPANY NEWS: Shares of Tesla are up 8% after the company reported third quarter results, with a net profit of $312M, the electric-vehicle maker's largest ever. Following the announcement, Wolfe Research upgraded Tesla to Outperform, while several other firms raised their targets on the stock. Nonetheless, several Wall Street analysts remain bearish, telling investors to "not get used to" this type of profitability.
Twitter shares are rising 15% after its better than expected third quarter earnings and revenue despite a larger than anticipated decline in monthly average users.
Microsoft gained 5% following the company's earnings report, with Piper Jaffray analyst Alex Zukin calling the quarter a "very strong start to its fiscal year," highlighted by a revenue beat of 4% and an earnings beat of 19%.
UBS analyst Colin Langan noted Ford (F) reported better than expected Q3 results and reaffirmed its guidance, calling the guidance in particular a "meaningful positive" given the China headwinds. Morgan Stanley analyst Adam Jonas also said he believes Ford's report can help calm negative sentiment and falling expectations in the equity and credit markets. Ford shares are up 8% near noon.
In contrast to those earnings winners, AMD (AMD) is plunging 14% after the chipmaker reported an in-line September quarter and guided its December quarter "modestly" below consensus, according to Mizuho analyst Vijay Rakesh. AMD CEO Lisa Su said GPU inventories "ended up being larger than expected," but still said during a post-earnings interview on CNBC that her company's "product story is doing quite well."
MAJOR MOVERS: Among the noteworthy gainers was Take-Two (TTWO), which jumped 8% after its new game "Red Dead Redemption 2" received many positive reviews, with Piper Jaffray analyst Michael Olson noting that the game's Metacritic score ranks it "among the top reviewed titles of all time."
Also higher were Sleep Number (SNBR) and Knowles (KN), which gained a respective 16% and 14% after reporting quarterly results.
Among the notable losers was AB InBev (BUD), which dropped 10% after the company reported lower than expected quarterly revenue and said that it is rebasing its dividend payout to accelerate deleveraging.
Also lower after reporting quarterly results were Curo Group (CURO) and Align Technology (ALGN), which fell 30% and 23%, respectively.
INDEXES: Near midday,
the Dow was up 319.29, or 1.30%, to 24,902.71, the Nasdaq was up 172.96, or 2.43%, to 7,281.36, and the S&P 500 was up 41.74, or 1.57%, to 2,697.84.