Summary:
- U.S. stocks recover, with Dow up by 1.2%, S&P 500 by 0.9%, and Nasdaq by 0.6%.
- Mixed corporate earnings and rising treasury yields had caused previous week's losses.
- Majority of companies surpass estimates, but stock declines seen for both outperforming and underperforming firms.
- Berkshire Hathaway reaches record high after reporting $10 billion quarterly operating profit.
- Tyson Foods misses revenue expectations, BeyondTech and Moderna stocks slump.
- Upcoming Consumer Price Index report to offer insights into Federal Reserve's monetary policy.
U.S. stocks closed higher on Monday, recovering from the losses suffered last week. The Dow surged by nearly 1.2 percent, the S&P 500 saw a rise of 0.9 percent, and the Nasdaq climbed by 0.6 percent.
The market rebounded after a week of declines in the major indexes. Rising treasury yields and mixed corporate earnings had raised concerns among investors. Despite the majority of companies surpassing Wall Street expectations this earnings season, the market witnessed stock declines from both underperforming and outperforming firms. George Ciboloni, portfolio manager at Penn Mutual Asset Management, highlighted that investors seemed confident about the current quarter's performance, expecting minimal troubles in the upcoming quarters. Any signs of economic uncertainty during earnings calls tend to lead to stock declines, even for companies that performed well. This has created a complex and multi-layered dynamic for the quarter, requiring a detailed analysis of individual company prospects. Among the notable movers on Monday, Berkshire Hathaway's shares surged by 3.4 percent to a record high, driven by Warren Buffet's conglomerate reporting over $10 billion in quarterly operating profit for the first time. However, Tyson Foods' shares fell by 3.8 percent after failing to meet Wall Street's revenue expectations for the third quarter. Vaccine manufacturers BeyondTech and Moderna also experienced declines, with drops of 7.5 percent and 6.5 percent respectively. BeyondTech's drug development budget was reduced due to a dip in demand affecting quarterly revenue. Moderna's stock was impacted by investment bank Learink lowering its price target for the company.
Investors are now looking forward to the upcoming inflation data release. The Consumer Price Index report, scheduled for Thursday, is anticipated to provide insights into the future trajectory of the Federal Reserve's monetary policy.