Stocks have been reacting positively to the first busy morning of the third quarter earnings season, which saw better than expected results from two of the biggest names in healthcare and several of the nation's largest banks. The solid start to the earnings season is, for the moment, trumping concerns about a report that China aims to have the U.S. roll-back some existing tariffs before committing to added agricultural purchases and the cutting of the global growth outlook by the IMF.
ECONOMIC EVENTS: In the U.S., the Empire State manufacturing index rose 2 points to a reading of 4 in October.
Additionally, the International Monetary Fund lowered its global growth outlook due to the negative effects of trade tensions. The IMF cuts its 2019 growth forecast to 3.0% from 3.2% in its prior view in July, while the 2020 projection was cut to 3.4% from 3.5% previously.
TOP NEWS: Among the four big banks that kicked off earnings season for the money centers, shares of JPMorgan (JPM) have reacted most favorably, rising 4% near noon. Wells Fargo (WFC) and Citi (C) are both rising as well, up 3.5% and 2.25%, respectively, following their own quarterly reports. Goldman Sachs (GS) is the standout to the downside, though its shares are only down 0.5% at midday following the investment bank's lower than expected headline earnings.
Johnson & Johnson (JNJ), which reported better than expected third quarter revenue and earnings, attributed its "strong performance" to "competitive underlying growth in Pharmaceuticals and Medical Devices." J&J, which also raised its fiscal year adjusted earnings view, said it sees no need for added legal reserves amid the series of lawsuits it is facing. J&J shares are up 2% near noon.
UnitedHealth (UNH) shares are up over 7% after the health insurance giant reported "strong Q3 results" that prompted it to increase its full year net earnings outlook.
MAJOR MOVERS: Among the noteworthy gainers was Reata Pharmaceuticals (RETA), which surged 59% higher after announcing that the registrational Part 2 portion of the MOXIe Phase 2 trial of omaveloxolone in patients with Friedreich's ataxia met its primary endpoint. Also higher was Aphria (APHA), which gained 24% after the cannabis company's report of a quarterly profit.
Among the notable losers was PagSeguro (PAGS), which dropped 12% after shareholder Universo Online proposed to sell 16.75M shares and after the company announced preliminary third quarter results. Also lower was Whiting Petroleum (WLL), which fell 6% after Wolfe Research analyst Josh Silverstein downgraded the stock to Underperform from Peer Perform with a price target of $8, down from $12.
INDEXES: Near midday, the Dow was up 267.42, or 1.0%, to 27,054.78, the Nasdaq was up 100.52, or 1.25%, to 8,149.17, and the S&P 500 was up 33.79, or 1.14%, to 2,999.94.
