The stock market gained Monday after the U.S. Senate passed a big tax, health care and climate bill over the weekend while investors prepared for another busy week of earnings. At least six stocks were breaking out of bases.
The Nasdaq composite gained 0.5% while the S&P 500 was up 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 vs. the same time on Friday.
The Nasdaq and the S&P are starting what could be their fourth week in a row of gains. Last week, the Nasdaq closed up 2.1% and the S&P up 0.4% higher. The Dow lost 0.1% on the week.
The Dow index is on track to close at or above 32,877.66 to exit correction territory, defined as a 10% drop, according to Dow Jones Market Data.
U.S. Stock Market Today Overview
Last Update: 12:02 PM ET 8/8/2022
The Senate passed a bill on Sunday with a tiebreaking 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, allots roughly $80 billion to the Internal Revenue Service and extends subsidies for health insurance under the Affordable Care Act. The House is expected to take up the bill on Friday.
Week Starts Off With Mixed Earnings Results
The latest earnings season isn’t going as poorly as feared, helping to fuel the market’s recent rebound, according to Yardeni Research. As of midweek, 356 (or 71%) of the S&P 500 companies had reported Q2 results. Revenues beat consensus forecasts by 2.5%. Earnings exceeded estimates by 5.6%. So far, 68% of the Q2 reporters have reported a positive revenue surprise, while 77% have beaten earnings forecasts.
To start the week of Q2 earnings, Tyson Foods (TSN) reported quarterly sales rose by 8%, but rising costs wiped out any profit growth. Shares plunged 9% Monday morning. The maker of chicken and other packaged meats posted $13.5 billion in revenue. Analysts surveyed by FactSet had been expecting $13.31 billion in sales. Profit was flat from a year ago amid rising costs for wages, animal feed and transportation.
Palantir Technologies (PLTR) on Monday reported June-quarter earnings that missed views, while revenue edged by Wall Street targets. PLTR stock tumbled 12% as revenue guidance came in below expectations
New Breakouts For Stock Market
In other news, Pfizer (PFE) formally announced on Monday it has agreed to buy Global Blood Therapeutics (GBT) for $5.4 billion. Pfizer said Monday it would 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 stock soaring 26%. On Monday GBT shares traded more than 4% higher, while PFE shares traded slightly higher.
Meanwhile. several stocks were breaking out of bases on Monday. Petroleo Brasileiro (PBRA), the state-owned oil company of Brazil, broke out of a cup base with a buy point of 13.70.
Building products maker Griffon (GFF) also broke out a cup base with a buy point of 31.12 and easily reached near the top of its 5% buy range.
Other breakouts include truck parts maker Paccar (PCAR), Waste Management (WM), transportation company CH Robinson Worldwide (CHRW) and New Fortress Energy (NFE).
Gas and energy infrastructure NFE broke out a cup base with a buy point of 52.47. At a time when energy stocks are not doing well, NFE is an IBD 50 best stocks to watch.
Looking Ahead For The Stock Market
Stocks in Asia and Europe mostly gained on Monday, with the London FTSE 100, the German DAX and the French CAC 40 all advancing. Japan’s Nikkei 224 and Shanghai’s core index also gained, while the Hong Kong Hang Seng Index was down 0.8%.
The 10-year U.S. Treasury yield rose 10 basis points to 2.78%. Crude oil prices rose 1% to $89.90 per barrel.
The Innovator IBD 50 ETF (FFTY) gained 0.1%, lagging the broad market’s gains.
Walt Disney (DIS) will headline another busy week of earnings reports as the stock market grows more optimistic about a soft landing for the U.S. economy. Other strong price performers with earnings coming up include Celsius (CELH), Aspen Technology (AZPN), Grocery Outlet (GO) and Shockwave Medical (SWAV).
Follow Michael Molinski on Twitter @IMmolinski
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