The Dow Jones Industrial Average rebounded Tuesday as Wall Street bet on better-than-expected earnings following a solid report from Johnson & Johnson.
The Dow climbed 255 points, or 0.79%. The S&P 500 ticked up 1.02%, and the Nasdaq Composite rose 1%.
Investors continued to assess second-quarter reports from major companies this week for clues on how businesses will handle economic pressures — including greater inflation and a stronger dollar — as recession fears persist.
Johnson & Johnson shares ticked higher after the company reported better-than-expected quarterly earnings and revenue, although the pharmaceutical giant also cut its full-year revenue and profit guidance.
Hasbro‘s revenue for the previous quarter came in a tad below expectations, while the toymaker’s earnings per share beat a Refinitiv forecast.
Shares of Halliburton rose slightly the back of sharply rising oil prices this year that boosted profits for the company in its most recent quarter.
So far, roughly 8% of S&P 500 companies have reported calendar second-quarter earnings. Of those companies, about two-thirds have beaten analyst expectations, FactSet data shows.
Wall Street is betting that stocks have mostly priced in a downturn after their sharp declines this year, though some market participants continued to advise investors to hold on to some cash and prepare for more losses ahead.
“[While] I acknowledge sentiment is bad and we could see a large, tactical rally, I am currently more concerned about protecting downside than missing upside, in the aggregate,” Wedbush analyst Kevin Merritt wrote in a Tuesday note.
On Monday, the Dow shed more than 200 points to end the day in the red, reversing a morning rally fueled by solid earnings reports from Goldman Sachs and Bank of America. Oil broke above $100 a barrel, and bitcoin surged to the highest levels seen since mid-June.
Late in Monday’s session, stocks were dragged down on a Bloomberg report that Apple would slow hiring and spending on growth next year to prepare for a potential economic downturn. Shares of the iPhone maker ended the day about 2.1% lower.