Upbeat Earnings News May Strengthen US Stocks

By Investors Hub

The major U.S. index futures are pointing to a higher opening on Tuesday, with stocks poised to extend the upward move seen in the previous session.

Better than expected earnings news from Dow components Johnson & Johnson (JNJ), Procter & Gamble (PG) and Travelers (TRV) may contribute to early strength on Wall Street

Stocks moved mostly higher over the course of the trading session on Monday, extending the strong upward move seen last week. With the gains, all three of the major averages reached new record closing highs.

The major averages saw further upside going into the close, ending the session at their best levels of the day. The Dow rose 142.88 points or 0.6 percent to 26,214.60, the Nasdaq jumped 71.65 points or 1 percent to 7,408.03 and the S&P 500 climbed 22.67 points or 0.8 percent to 2,823.97.

Traders did not show much of a response to the subsequent government shutdown but saw further upside amid signs that the shutdown will be resolved.

The Senate voted 81 to 18 in favor of limiting debate on a short-term spending bill, which would fund the government through February 8th.

Democrats agreed to vote to advance the short-term spending bill after Republican leaders promised to hold a vote on legislation providing protections for young illegal immigrants brought to the country as children.

The shutdown came after a spending bill approved by House Republicans failed to clear a procedural hurdle in the Senate on a largely party line vote of 50 to 49.

The bill would have funded the government through February 16th, reauthorized the popular Children’s Health Insurance program for six years and delayed some Obamacare taxes.

The shutdown is largely due to a disagreement over whether to include protections for young illegal immigrants brought to the country as children in the spending bill.

Democrats have demanded the inclusion of protections for the illegal immigrants known as Dreamers, while Republicans have argued the issue should be addressed separately.

Both sides blamed each other for the government shutdown, which marks the first official shutdown since October of 2013.

Biotechnology stocks showed a substantial move to the upside on the day, driving the NYSE Arca Biotechnology Index up by 6 percent. With the jump, the index has reached a record closing high.

Juno Therapeutics (JUNO) led the biotech sector higher after the company agreed to be acquired by Celgene (CELG) for approximately $9 billion in cash.

Energy, retail, and internet stocks also moved notably higher on the day, contributing to the advanced by the broader markets.

Dipo Olowookere is a journalist based in Nigeria that has passion for reporting business news stories. At his leisure time, he watches football and supports 3SC of Ibadan. Mr Olowookere can be reached via dipo.olowookere@businesspost.ng

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