Stocks extended gains on Wednesday, as investors eyed a batch of stronger-than-expected earnings results with increasing optimism over the trajectory of corporate profits, even in the face of ongoing supply chain constraints.
The Dow jumped by more than 0.5% at session highs to reach a fresh all-time intraday record, taking out its previous record high from August. The S&P 500 also hovered near a record level and logged sixth straight day of gains, marking its longest winning streak since the beginning of July.
Bitcoin (BTC) prices rose above $66,000 to set a fresh all-time high. The cryptocurrency held onto gains from earlier this week, after the first-ever Bitcoin futures exchange-traded fund, or the ProShares Bitcoin Strategy ETF (BITO), rose by nearly 5% in its public debut on the New York Stock Exchange on Tuesday.
Shares of Netflix (NFLX) fell despite posting third-quarter earnings and subscriber growth that exceeded Wall Street's expectations. United Air Lines (UAL) shares rose after the carrier delivered a smaller-than-expected quarterly loss and revenue that topped expectations, albeit while remaining some 32% below 2019 levels.
These better-than-feared earnings results — in addition to those from earlier reporters including the big banks last week, and Procter & Gamble and Johnson & Johnson earlier this week — have helped assuage traders' concerns that corporate profits would slow dramatically after a second-quarter surge. Investors have been nervously monitoring inflation data showing prices jumping by the most in decades, on top of a myriad reports over persistent labor and materials shortages and delivery issues. All of these factors were expected to weigh heavily on corporate profits.
"We think investors have been too pessimistic on earnings expectations," Jon Adams, BMO Capital Markets senior investment strategist, told Yahoo Finance Live. "It does look like Q2 was likely the peak, but Q3 is going to be strong, probably above 30% year-over-year [growth]."
"We think the strength will continue into the fourth quarter, we're not overly concerned about profit margins," Adams added. "We are closely monitoring supply chain issues and increasing wage pressures but still think that profit margins are at healthy levels, and that there's more upside to come."
Other pundits also suggested price pressures may begin to ease over the coming quarters.
"I do think that as these supply chain issues subside throughout the course of 2022, we're also going to start to see inflation moderate from these elevated levels," Meera Pandit, global market strategist at JPMorgan Asset Management, told Yahoo Finance Live. "It won't be completely transitory. Things like housing, things like food – we've seen wages come a little bit higher. So we're going to see higher inflation than we did during the last expansion. But it's going to come down and moderate from these levels."
4:01 p.m. ET: S&P 500, Dow close out the session in the green, with the Dow just below a record closing high
Here's where the three major indexes ended the session on Wednesday:
S&P 500 (^GSPC): +16.74 (+0.37%) to 4,536.37
Dow (^DJI): +152.62 (+0.43%) to 35,609.93
Nasdaq (^IXIC): -7.41 (-0.05%) to 15,121.68
12:18 p.m. ET: Dow sets record intraday high
The Dow Jones Industrial Average rose to an all-time high during Wednesday's session, reaching as much as 35,632.94. This marked the Dow's first record since Aug. 16.
A more than 2.5% jump in shares of Verizon helped pull the index higher. Materials company Dow Inc., UnitedHealth and The Travelers Companies also outperformed.
The S&P 500 also came within striking distance of its own record high from early September.
12:03 p.m. ET: Pinterest shares surge, triggering volatility halts, after report says PayPal is mulling an acquisition
Shares of Pinterest (PINS) rocketed higher after Bloomberg reported the social media company was an acquisition target of PayPal (PYPL), in a deal that could value the former at a 26% premium to its current levels. The stock gained about 10% just after noon in New York after triggering at least two trading halts for volatility. PayPal shares dropped about 3%.
According to Bloomberg's report, PayPal and Pinterest have discussed an agreement for the latter to be a acquired for around $70 per share, giving the online media company a value of about $39 billion. The report, which cited unnamed people familiar with the matter, also said this matter was still in discussion, and that a deal could ultimately fall through.
Pinterest shares have come under pressure this year as individuals returned to in-person activities and eschewed online outlets. Shares of the company have dipped by 16% so far in 2021. PayPal's stock, meanwhile, has increased by 16% for the year-to-date, and by 150% since the start of 2020.
10:20 a.m. ET: Adobe expects a record U.S. online holiday shopping season despite widespread supply shortages
U.S. e-commerce sales over the holidays are predicted to hit a record this year, according to Adobe's annual online holiday shopping forecast. However, widespread shortages may keep some companies from keeping pace with surging consumer demand.
The firm expects holiday-period online sales to reach an all-time high of $207 billion from Nov. 1 to Dec. 31 in the U.S. That would represent a jump of 10% compared to the same period in 2020. Worldwide online sales online are expected to grow 11% over last year to reach $910 billion, Adobe added.
Though demand is still strong, supply-chain challenges have weighed on companies heading into the holiday shopping period.
"Compared to a pre-pandemic period (Jan 2020), the prevalence of out-of-stock messages has risen a whopping 172% going into the holiday season," Adobe said in its press statement. "Adobe expects it to remain at this level, increasing for certain products throughout the season."
The firm added apparel was currently experiencing the highest level of out-of-stocks, followed by sporting goods, baby products and electronics.
9:31 a.m. ET: Stocks open higher
Here's where markets were trading just after the opening bell:
S&P 500 (^GSPC): +7.74 (+0.17%) to 4,527.37
Dow (^DJI): +30.55 (+0.09%) to 35,487.86
Nasdaq (^IXIC): +20.24 (+0.15%) to 15,151.3
Crude (CL=F): -$1.16 (-1.40%) to $81.80 a barrel
Gold (GC=F): +$13.60 (+0.77%) to $1,784.10 per ounce
10-year Treasury (^TNX): +1.2 bps to yield 1.646%
9:20 a.m. ET: Mortgage rates jump to highest level in 6 months: MBA
Mortgage rates jumped to their highest level in six months amid a march higher in benchmark interest rates, with inflation expectations increasing alongside a rise in prices for a broad array of goods and services.
The 30-year fixed mortgage rate increased to 3.23% for the week ended Oct. 15, according to a weekly update from the Mortgage Bankers Association. This compared to 3.18% during the prior week.
The latest rate marched the highest since April, and a jump of more than 0.25 percentage points since late July.
For the latest week, mortgage application volume also tumbled 6.3%, with the rise in rates deterring many potential homebuyers from entering the market. During the previous week, mortgage applications had risen by 0.2%.
7:32 a.m. ET Wednesday: Stock futures trade little change amid earnings
Here's where markets were trading Wednesday morning:
S&P 500 futures (ES=F): unchanged, trading at 4,511.25
Dow futures (YM=F): -4 points (-0.01%), to 35,319.00
Nasdaq futures (NQ=F): +11 points (+0.07%) to 15,409.50
Crude (CL=F): -$0.99 (-1.19%) to $81.97 a barrel
Gold (GC=F): +$11.40 (+0.64%) to $1,781.90 per ounce
10-year Treasury (^TNX): +0.3 bps to yield 1.637%
6:02 p.m. ET Tuesday: Stock futures point to a lower open
Here's where markets were trading Tuesday evening:
S&P 500 futures (ES=F): +2 points (+0.04%), to 4,513.25
Dow futures (YM=F): +8 points (+0.02%), to 35,331.00
Nasdaq futures (NQ=F): +3.75 points (+0.02%) to 15,402.25
Emily McCormick is a reporter for Yahoo Finance. Follow her on Twitter