Stock Market News for Oct 27, 2021

·4 min read

U.S. stocks continued their winning streak on Tuesday, with the Dow and the S&P 500 closing at record highs for the second straight day as investors digested a slew of earnings reports from some of biggest American corporations. All the three major indexes ended in positive territory.

How Did The Benchmarks Perform?

The Dow Jones Industrial Average (DJI) climbed less than 0.1% or 15.73 points to finish at a new record high of 35,756.88 points. The blue-chip index earlier hit an intraday high of 35,892.92 but couldn’t hold on to the gains.

The S&P 500 gained 0.2% or 8.31 points to close at a fresh record high of 4,574.79 points, after hitting an intraday high of 4,598.53 points.

Energy and utilities stocks were once again the best performers, while communications services were once again a drag. The Communication Services Select Sector SPDR (XLC) fell 0.9%, while the Energy Select Sector SPDR (XLE) advanced 0.6%. The Utilities Select Sector SPDR (XLU) gained 0.5%. Nine the 11 sectors of the benchmark index ended in positive territory.

The tech-heavy Nasdaq rose 0.1% or 9.01 points to finish at 15,235.71 points. The index almost touched it Sep 7 record closing high of 15,374.33 points after hitting 15,384 points at one point of the day. Shares of Facebook, Inc. FB declined 3.9. Facebook has a Zacks Rank #3 (Hold). You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.

The fear-gauge CBOE Volatility Index (VIX) was up 4.86% to 15.98. A total of 12.34 billion shares were traded on Tuesday, higher than the last 20-session average of 10.41 billion. Decliners outnumbered advancers on the NYSE by a 1.13-to-1 ratio. On Nasdaq, a 1.23-to-1 ratio favored declining issues.

Investors’ Digest Quarterly Results

Markets started on a high on Tuesday following the earlier session’s rally. A slew of big tech names announced robust third-quarter earnings reports that helped investor sentiment get a boost. Investors now seem less worried about inflation and are focusing more on the quarterly results. This has seen the S&P 500 clocked gains in nine of the last 10 sessions.

Among the big names that reported their quarterly results on Tuesday were Lockheed Martin Corporation LMT and Eli Lilly and Company LLY. Lockheed Martin reported adjusted earnings of $6.66 per share, which surpassed the Zacks Consensus Estimate of $1.96. Eli Lilly reported adjusted earnings of $1.94 per share, which missed the Zacks Consensus Estimate of $1.98 per share.

However, it was Facebook, which reported its third-quarter results on Monday, which weighed on all the major indexes on Tuesday around midday. The social media giant’s shares traded higher and flat at one time but then hit a low. At one point it dropped as low as 5%.

Facebook missed analysts’ expectations for revenues and monthly active users despite surpassing earnings expectations. It reported quarterly earnings of $3.22 per share, beating the Zacks Consensus Estimate $3.20 per share. Revenues of $29.01 billion missed the Zacks Consensus Estimate of $29.55 billion.

A number of big names will be reporting their quarterly results over the next few days of the week and investors are anxiously waiting. 

Economic Data

In economic data released on Tuesday, Case-Shiller Home Price Index showed that home priced jumped 19.8% in August on a year-over-year basis. However, it came in line with the prior month’s increase.

Separately, the Commerce Department said that new home sales rose 14% in September to a seasonally adjusted annual rate of 800,000 units. Analysts had expected new home sales to rise to 760,000 units. This is also the highest level attained since March. August sales were revised down to 702,000 units from the initially reported 740,000 units.

In other economic data, the Conference Board reported that U.S. consumer confidence index jumped to 113.8 in October from a revised 109.8 in September. October’s jump comes after three straight months of decline.

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