Dow industrials were up as much as 140 points Tuesday after blue-chips Goldman Sachs, Johnson & Johnson and UnitedHealth Group reported quarterly earnings that were much higher than forecasts.
The Dow Jones Industrial Average closed up 75.54 points, or 0.4% at 18,164.94. The majority of its blue-chips ended higher.
Healthcare heavyweight Johnson & Johnson (NYSE: JNJ) reported on Tuesday that it posted a 27% jump in third quarter profit thanks to soaring prescription drug sales. The world’s leading maker of healthcare products reported a net income of $4.27 billion, up from $3.36 billion a year ago. Revenue climbed to $17.8 billion from $17.1 billion last year.
Meanwhile, US multinational investment bank Goldman Sachs Group (NYSE: GS) reported a 58% surge in third quarter profit thanks to surging trade revenues. The New York-based bank recorded a profit of $2.09 billion on revenues of $8.17 billion. The third quarter result easily surpassed last year’s $1.43 billion profit on revenue of $1.43 billion.
Goldman Sachs was easily among the Dow’s best performers. The company’s stock rose 2.2%, surpassed only by a 6.9% surge in UnitedHealth Group Inc. (NYSE: UNH), which also reported higher third quarter profits thanks to strong growth from its Optum unit.
Elsewhere, chipmaker Intel Corp (NASDAQ: INTC) recorded a gain of 1.2%. A slew of technology and pharmaceutical companies also recorded gains in the vicinity of 1%.
Despite reporting solid earnings, Johnson & Johnson’s stock was among the worst performers Tuesday, as investors focused on disappointing sales in the company’s consumer products division. The company’s stock fell 2.6%. Tech giant IBM (NYSE: IBM) posted a similar loss.
After a cautious start to the week, US stocks were higher across the board Tuesday. The large-cap S&P 500 Index climbed 0.6% to 2,139.60. The technology-heavy Nasdaq Composite Index rose 0.9% to 5,243.84.
European markets also finished firmly higher, led by miners and bank shares. The Stoxx Europe 600 climbed 1.5%. In individual bourses, the UK’s FTSE 100 closed 0.8% higher. Germany’s DAX also added 1.2%.
In economic data, US consumer inflation improved to 1.5% in the 12 months through September, up from 1.1% the month before, the Labor Department said. The increase was in line with the median estimate.
Meanwhile, housing market conditions remained strong in October, according to the National Association of Home Builders (NAHB). The NAHB/Wells Fargo housing market index leveled off slightly to 63 from 65, but the underlying trend continued to show upside.
“The October reading represents a mild pullback from a jump in September, and indicates that the housing market continues to make slow and steady gains,” said NAHB chief economist Robert Dietz. “Moreover, mortgage rates remain low and the HMI index measuring future sales expectations has been over 70 for the past two months. These factors will sustain continued growth in the single-family market in the months ahead.”
EconomicCalendar.com provides the latest economic news and financial events that move the market.