The stock market rose on Monday after the US Senate passed a major tax, health care and climate bill over the weekend, as investors braced 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 rose 0.3%. The Dow Jones Industrial Average rose 0.4%. The small-cap Russell 2000 rose 1.3%.
Volume rose on the Nasdaq but fell on the NYSE from the same time on Friday.
The Nasdaq and S&P are starting what could be their fourth straight week of gains. Last week, the Nasdaq closed 2.1% higher and the S&P 0.4% higher. The Dow lost 0.1% for the week.
The Dow is on track to close at or above 32,877.66 to break out of correction territory, defined as a 10% decline, according to Dow Jones Market Data.
Overview of the US stock market today
Last updated: 12:02 PM ET 8/8/2022
The Senate passed a bill on Sunday, with a vote cast by Vice President Kamala Harris, spending hundreds of billions of dollars on climate and health programs while raising taxes on big, profitable companies. The legislation offers tax incentives to reduce carbon emissions, aims to allow Medicare to negotiate the price of some prescription drugs, allocates roughly $80 billion to the Internal Revenue Service and expands health insurance subsidies under the Affordable Care Act. The House is expected to consider the bill on Friday.
The week starts with mixed earnings results
The latest earnings season hasn’t gone as badly as feared, helping to fuel the market’s recent recovery, according to Yardeni Research. As of midweek, 356 (or 71%) of the S&P 500 companies had reported second-quarter results. Revenue beat consensus estimates by 2.5%. Earnings beat estimates by 5.6%. So far, 68% of Q2 reporters reported a positive revenue surprise, while 77% beat earnings estimates.
To start the second quarter earnings week, Tyson Foods (TSN) reported quarterly sales rose 8%, but rising costs wiped out any profit growth. Shares tumbled 9% Monday morning. The maker of chicken and other packaged meats reported $13.5 billion in revenue. Analysts polled by FactSet had expected $13.31 billion in sales. Profit was unchanged from the previous year amid rising costs for wages, animal feed and transport.
Palantir Technologies ( PLTR ) on Monday reported June quarter earnings that were no-shows, while revenue was on the fringes of Wall Street targets. Shares of PLTR fell 12% as revenue guidance fell short of expectations
New breakouts for the stock market
In other news, Pfizer (PFE) officially announced on Monday that it has agreed to buy Global Blood Therapeutics (GBT) for $5.4 billion. Pfizer said Monday it will pay $68.50 per 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, with GBT shares jumping 26%. GBT shares traded more than 4% higher on Monday, while PFE shares traded slightly higher.
Meanwhile. several stocks were breaking out of bases on Monday. Brazilian oil (PBRA), Brazil’s state oil company, broke out of the cup base with a buy point of 13.70.
Manufacturer of construction products white-headed (GFF) also broke a buy base with a buy point of 31.12 and easily reached near the top of its 5% buy range.
Other breakthroughs include a truck parts maker Pakar (PCAR), Waste Management (WM), a transport company CH Robinson Worldwide (CHRW) and New fortress energy (NFE).
Gas and Energy Infrastructure NFE broke out on a bowl basis with a buy point of 52.47. At a time when energy stocks are not doing well, NFE is the IBD 50 Best Stocks to Watch.
Looking at the stock market
Shares in Asia and Europe were mostly higher on Monday, with London’s FTSE 100, Germany’s DAX and France’s CAC 40 all higher. Japan’s Nikkei 224 and Shanghai’s main index also rose, while Hong Kong’s Hang Seng index fell 0.8 percent.
The yield on the 10-year U.S. Treasury note rose 10 basis points to 2.78%. Crude oil prices rose 1% to $89.90 a barrel.
The Innovator IBD 50 ETF ( FFTY ) gained 0.1%, lagging the broad market’s gains.
Walt Disney ( DIS ) will lead another busy week of earnings reports as the stock market grows more optimistic about a soft landing for the US economy. Other strong price performers with earnings ahead include Celsius (CELH), Aspen Technology (AZPN), Grocery outlet (GO) and Shockwave Medical (SWAV).
Follow Michael Molinski on Twitter @IMmolinski
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