Stock Market News for Oct 17, 2024

U.S. stock markets closed higher on Wednesday buoyed by strong third-quarter 2024 earnings results. Market participants seemed confident about solid fundamentals of the U.S. economy. This evaporates concerns about a near-term recession. All three major stock indexes ended in positive territory.

How Did The Benchmarks Perform?

The Dow Jones Industrial Average (DJI) rose 0.8% or 337.28 points to close at 43,077.70, marking its fresh closing high. Notably, 21 components of the 30-stock index ended in positive territory while 9 in negative zone. The tech-heavy Nasdaq Composite finished at 18,367.08, gaining 0.3% due to strong performance by technology giants. 

The S&P 500 rose 0.5% to finish at 5,842.47. Nine out of 11 broad sectors of the broad-market index ended in positive territory while one in negative zone. The Financials Select Sector SPDR (XLF), the Utilities Select Sector SPDR (XLU) and the Real Estate Select Sector SPDR (XLRE) increased 1.2%, 2% and 1%, respectively.

The fear-gauge CBOE Volatility Index (VIX) was down 5.1% to 19.58. A total of 10.63 billion shares were traded on Wednesday, lower than the last 20-session average of 12.13 billion. Advancers outnumbered decliners on the NYSE by a 2.38-to-1 ratio. On Nasdaq, a 1.67-to-1 ratio favored advancing issues.

Solid Start of Q3 Earnings Season

We are in the initial stage of the third-quarter 2024 earnings season. As of Oct 16, 48 companies of the broad-market index – the S&P 500 – reported their quarterly financial numbers. Total earnings of these 29 members were up 5.2% from the same period last year on 4.9% higher revenues, with 81.3% beating EPS estimates and 72.9% beating revenue estimates.

Looking third-quarter as a whole, total earnings for the S&P 500 index are expected to be up 3.6% from the same period last year on 4.6% higher revenues. This would follow the 10.2% earnings growth for the index in the preceding period on 5.5% higher revenues.

Investors seem more confident about the health of the U.S. economy. This will enable the Fed to achieve its much-hyped soft-landing of the economy.

A Few Big Earnings Results

Morgan Stanley MS came out with quarterly earnings of $1.88 per share, beating the Zacks Consensus Estimate of $1.57 per share. This compares to earnings of $1.38 per share a year ago. These figures are adjusted for non-recurring items. Morgan Stanley posted revenues of $15.38 billion for the third quarter, surpassing the Zacks Consensus Estimate by 7.77%. This compares to year-ago revenues of $13.27 billion.

U.S. Bancorp’s USB third-quarter 2024 adjusted earnings per share (excluding the impacts of notable items) of $1.03, which beat the Zacks Consensus Estimate by 3%. However, total revenues in the reported quarter were $6.83 billion, down 2.4% year over year. The top line also missed the Zacks Consensus Estimate by 0.7%.

Synchrony Financial SYF came out with quarterly earnings of $1.94 per share, beating the Zacks Consensus Estimate of $1.77 per share. This compares to earnings of $1.48 per share a year ago. These figures are adjusted for non-recurring items. The company posted revenues of $4.61 billion for the quarter ended September 2024, surpassing the Zacks Consensus Estimate by 2.09%. This compares to year-ago revenues of $4.36 billion.

Consequently, stock prices of Morgan Stanley, U.S. Bancorp and Synchrony Financial advanced 6.5%, 4.7% and 6.1%, respectively. U.S. Bancorp and Synchrony Financial currently carry a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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