Wall St lifts after better than expected earnings

The ASX is set to rise after US stocks rebounded as Goldman Sachs beat forecasts and Netflix gained subscribers.

US stocks rose after upbeat earnings reports. Picture: AP Photo/Richard Drew.

Better-than-expected corporate results lifted the S&P 500 to its biggest advance since September.

European equities also rallied, boosted by the energy and mining sectors.

The Australian share market is also set to open higher, with ASX futures up 13 points at 7.20am (AEDT).

The rise comes as US stocks have struggled to maintain a rally in recent trading sessions. Prior to Tuesday, the S&P 500 hadn’t risen 0.5 per cent or more in October.

The index has alternated between gains and losses each trading session for nearly two weeks, and the declines have outpaced the advances. On Monday, the S&P 500 closed at its lowest level in more than a month.

Overnight, mostly upbeat quarterly earnings reports helped lift US stocks.

The Dow Jones Industrial Average rose 76 points, or 0.4 per cent, to 18162. The S&P 500 gained 0.6 per cent, while the Nasdaq Composite rose 0.9 per cent.

Shares of Netflix jumped 19 per cent after the company posted a surge in new subscribers, while Goldman Sachs Group rose 2.2 per cent after it beat expectations for both profits and revenue.

Investors’ expectations for bank stocks had already improved in recent sessions after lenders including J.P. Morgan Chase and Citigroup exceeded analysts’ estimates.

Health-care stocks were among the biggest gainers with health-care companies in the S&P 500 rising 1.1 per cent. UnitedHealth Group climbed 6.9 per cent after the health insurer boosted its earnings guidance for the year and reported strong profit growth in the prior quarter.

Biotechnology stocks also were big gainers on Tuesday, with the Nasdaq Biotechnology Index rising 1.4 per cent.

“Biotech has been hit so hard that whenever we see a rebound in the market like we are today it gives them a small bounce after getting so hammered,” said Mohit Bajaj, director of ETF trading solutions at broker WallachBeth Capital LLC.

So far this month biotech stocks are down nearly 7 per cent, compared with the broader market’s roughly 1 per cent decline.

Tempering broader stock-market gains, however, shares of International Business Machines fell 2.6 per cent after the company posted declines in revenue and profits, while shares of Visa dropped 0.7 per cent after its chief executive said he would step down.

The WSJ Dollar Index continued to weaken Tuesday and was last down 0.1 per cent. Analysts attributed the move to recent disappointing US economic data and mixed messages from Federal Reserve officials on the course of interest rates.

A “bout of Fed confusion” has taken the steam out of the recent dollar rally, said Viraj Patel, foreign-exchange strategist at ING.

Fed Vice Chairman Stanley Fischer said Monday the bank is near its official policy goals, while a number of Fed officials are building a case to skip over the November policy meeting and raise rates again in December.

US consumer prices, which Tuesday showed inflation slowly rising, will play a part in that decision. The consumer-price index, which measures what Americans pay for everything from cars to dentistry, rose a seasonally adjusted 0.3 per cent from a month earlier, according to the Labor Department. That met the expectations of economists surveyed by The Wall Street Journal.

Rising inflation expectations had pressured long-dated government bonds in recent sessions, in turn dragging down risky assets such as stocks. Inflation expectations are at a 16-month high, according to Bank of America’s latest fund manager survey, with respondents viewing the 10-year Treasury yield as the biggest driver of equity prices.

The yield on the benchmark 10-year US Treasury note fell to 1.748 per cent, according to Tradeweb, from 1.766 per cent on Monday. Yields move inversely to prices.

US-traded crude oil rose 0.7 per cent to $US50.29 a barrel.

The Stoxx Europe 600 advanced 1.5 per cent with every sector trading in positive territory.

Earlier, shares in Asia advanced, as markets in Hong Kong and Shanghai more than reversed Monday’s losses, and Japan’s Nikkei Stock Average inched up 0.4 per cent.

Dow Jones