Wall Street returns, backed by bargain hunters

NEW YORK (Reuters) – The major US stock indices posted modest gains on Tuesday, helped by chip share gains as investors benefited from more favorable prices following a steep decline in equities recently.

A trader works on the New York Stock Exchange (NYSE) floor in New York, USA, October 29, 2018. REUTERS / Brendan McDermid

The consumer staples sector, which was supported by Coca-Cola stocks, was one of the leading sectors, one day after a volatile session that brought the S & P 500 benchmark close to confirming its second correction of 2018.

However, the stocks ended Monday's session low and continued to climb higher on Tuesday.

"This is a continuation of the recovery we saw yesterday," said Hugh Johnson, chief investment officer at Hugh Johnson Advisors of Albany, New York.

"The silver lining behind the dark cloud is that stocks are driven to levels that are significantly undervalued," said Johnson.

The Dow Jones Industrial Average rose 175.96 points or 0.72 percent to 24,618.88, the S & P 500 rose 11.65 points or 0.44 percent to 2,652.9 and the Nasdaq Composite added 19.58 points or 0.28 percent to 7,069.87.

According to the I / B / E / S of Refinitive, the S & P 500 companies had a 25.3 percent increase in third-quarter earnings with more than half of the respondents.

Despite the large increase in profits, some well-known companies have published disappointing reports. On Tuesday, General Electric's shares fell 10.5 percent, according to the report, in which the conglomerate drastically reduced its dividend and said it faces a deeper balance sheet review.

"Most of the profits came in, most were fine," said Rick Meckler, Partner at Cherry Lane Investments, New Vernon, New Jersey.

"It's just that some of the missing companies are among the best known and have somewhat overshadowed the better profits of smaller or lesser known companies."

The Philadelphia semiconductor index jumped 2.4 percent, with Intel rising 4.2 percent and giving the S & P 500 a big boost.

Chip stocks fell broadly on Monday as renewed concerns about tensions between the US and China triggered the decline in the market.

US President Donald Trump said he believes there will be "a great deal" of trade with China, but warned that he will have billions in new fares if a deal is not possible.

Chip stocks also rose after chipmaker KLA-Tencor, whose shares rose 6.1%, outperformed expectations.

In other earnings reports, Coca-Cola co-shares rose 1.5 percent as quarterly sales and the beverage maker's earnings exceeded Wall Street expectations.

Under Armor Inc's shares increased 22.8 percent after the sportswear manufacturer's positive earnings guidance and full-year earnings guidance was positive.

Progressive problems outperformed the NYSE declining by a ratio of 1.50 to 1; on the Nasdaq, a ratio of 1.53 to 1 favored the advanced.

The S & P 500 recorded 10 new 52-week highs and 25 new lows; The Nasdaq Composite recorded 14 new highs and 189 new lows.

Additional reports by Sinead Carew of New York and Shreyashi Sanyal of Bangalore; Cut by Sriraj Kalluvila and James Dalgleish

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