US stocks advanced for another day, extending a comeback that started the week as the earnings season kicks into high gear.
The S&P 500 (^GSPC) jumped 1.4%, while the Dow Jones Industrial Average (^DJI) added 420 points, or 1.4%. The tech-heavy Nasdaq Composite (^IXIC) rose 1.3%.
Sentiment was bolstered on Tuesday by third-quarter results from Goldman Sachs (GS) – Wall Street’s top investment bank – which posted earnings that beat analysts’ estimates across the board despite tough comparisons from a year to year. Shares rose more than 5% at the start of the session.
In an interview with CNBC, CEO David Solomon warned that there was a “good chance” that the US economy would enter a recession next year.
“This environment as we approach 2023 is an environment that you need to be careful and prepared for,” he said.
Goldman Sachs is the latest of the country’s six megabanks to report its results. Despite better-than-expected numbers from some names in finance that boosted stocks on Monday, the banking sector reported a 13% year-over-year profit decline for the third quarter, mainly due to the increased provisions for loan losses to prepare for a possible recession, according to FactSet Research. The big Wall Street banks are indicators of the US economy and usually set the tone for earnings season.
Elsewhere on the corporate front, shares of Carnival (CCL) rebounded nearly 12% after Carnival Holdings, a subsidiary of the cruise line, announced it would offer $1.25 billion worth of senior priority tickets to due in 2028 and would use the proceeds to cover debt and other expenses.
Shares of Colgate-Palmolive Company (CL) edged higher following a CNBC report that Daniel Loeb’s Third Point has amassed a substantial stake in the company and sees value in a potential spinoff from its Hill’s business. Pet Nutrition and other brands.
Shares of Salesforce (CRM) also climbed 5% after activist investor Jeffrey Smith said his investment firm Starboard Value had engaged with company management on possible ways to boost its valuation. .
![Goldman Sachs Chairman and CEO David Solomon speaks during the 2022 Milken Institute Global Conference in Beverly Hills, California, U.S., May 2, 2022. REUTERS/Mike Blake](https://oponame.com/wp-content/uploads/2022/10/Live-stock-market-news-updates-Stocks-gain-for-second-day.jpeg)
Tuesday’s moves come after all three major averages rallied in the previous session, with the S&P 500, Dow and Nasdaq posting gains of 2.7%, 1.9% and 3.4%, respectively. .
“As we keep reminding you, this kind of outsized movement is not by itself historically indicative of a healthy market or an investment bottom,” DataTrek Research co-founder Jessica Rabe said in a statement. note.
The number of days the S&P 500 gained more than 1% was 54 last year. Monday’s rebound brings the total of those year-to-date gains to 100 – a significant milestone that the benchmark has reached for only another seven years in the past six decades: during the Saudi oil embargo , the dotcom bubble of 2000, the global financial crisis of 2008, and the pandemic crash of 2020.
With equity inflows nearing a record high last week, investors stepped up bets on the market bottom. But many Wall Street strategists argued that the optimism was premature, especially as what should be a murky earnings season begins.
![Traders work on the floor of the New York Stock Exchange (NYSE) in New York, U.S., October 14, 2022. REUTERS/Brendan McDermid](https://oponame.com/wp-content/uploads/2022/10/1666116230_582_Live-stock-market-news-updates-Stocks-gain-for-second-day.jpeg)
Bank of America’s Global Fund Manager Survey released Tuesday morning found that 91% of respondents said corporate earnings are unlikely to grow 10% or more in the next year, the highest share of investors in the survey’s history – a sign of a further decline in forward earnings-per-stock estimates for the S&P 500 index.
As such, BofA analysts felt that any indication that the end of the equity rout is close to merely “tasty morsels for another bearish rally”, adding that the institution is forecasting a “big dip” and a subsequent “big rally” in the first half of 2023, when the Federal Reserve is expected to change course and start cutting rates.
This month’s survey “screams macro capitulation, investor capitulation, the beginning of political capitulation,” wrote the strategists led by Michael Hartnett.
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Alexandra Semenova is a reporter for Yahoo Finance. Follow her on Twitter @alexandraandnyc
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