U.S. stocks were little changed on Tuesday as Wall Street geared up for the heart of corporate earnings season.
The Dow Jones Industrial Average added 26 points, or 0.1%. The S&P 500 and the Nasdaq Composite traded near the flatline. The S&P 500 and the Nasdaq both closed at record highs in the previous session.
Strong earnings results from some of the larger companies with more impact on the indexes supported the market on Tuesday. General Electric shares jumped 9% on its better-than-expected industrial free cash flow for the fourth quarter and a rosy outlook for the year. Johnson & Johnson popped more than 3% after the drugmaker's earnings topped expectations.
Tech giant Microsoft will announce its fiscal second-quarter earnings after the bell. Shares of Microsoft climbed more than 1%.
Wild swings resumed in heavily shorted stocks, including GameStop and AMC Entertainment, as enthusiastic retail investors active in chat rooms bet against short-selling hedge funds. The volatility has some investors concerned about stocks becoming detached from fundamentals as speculation runs rampant.
"The short squeeze/volatility we saw in heavily-shorted stocks such as GameStop and others yesterday only further confirms that, at least in the near term, complacent/frothy investor sentiment is the biggest near-term risk to stocks," Tom Essaye, founder of Sevens Report, said in a note Tuesday.
GameStop was up another 20% on Tuesday. AMC gained more than 10%.
Companies started the earnings season with a high beat rate. Of the S&P 500 components that have already reported earnings, over 70% have topped Wall Street's expectations on both sales and earnings, according to data from Bank of America.
"The combination of virus containment and policy support should bolster economic growth this year, encouraging broader industry participation in economic activity and strong earnings recoveries in later quarters," said Lauren Goodwin, economist and portfolio strategist at New York Life Investments.
On the Covid-19 front, health officials and policymakers continued to caution the public about new strains of the virus. Moderna said Monday that its vaccine does provide some protection against a variant found in South Africa, while officials in Minnesota reported the first U.S. confirmed case of a strain found in Brazil.
Investors are also waiting for a new policy statement from the Federal Reserve as the central bank begins its two-day meeting on Tuesday.
Former Fed Chair Janet Yellen was confirmed as Treasury secretary, becoming the first woman to hold the position.
January 26, 2021 at 06:05AM
https://www.cnbc.com/2021/01/25/stock-market-futures-open-to-close-news.html
Stocks are little changed amid a busy day of earnings, GE shares jump - CNBC
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