By Devik Jain and Shreyashi Sanyal and Sinéad Carew
(Reuters) – The S&P 500 and Dow closed higher on Wednesday, with the Dow hitting an intraday record high under the impact of better-than-expected third-quarter corporate balance sheets.
While the Nasdaq underperformed as tech stocks took a break, the Dow Jones surpassed its previous record set in mid-August during the session, while the S&P 500 index came within 5 points of its early September high during the session.
The S&P health index rose for the second straight day with help from Anthem and Abbott, which gained ground after releasing impressive financial forecasts.
The S&P came to nearly 6% below its record high on Oct. 4, as investors worried about supply-chain problems, pressure on profit margins, higher wages and rising input costs ahead of the corporate balance sheet season, that started last week.
And while US companies have cited supply chain problems and higher costs, investors have been relieved, for now, that they are able to maintain profit margins by passing on higher prices for clients, according to Jack Janasiewicz, portfolio manager strategist at Natixis Investment Managers Solutions.
“The balance sheets are what matters and, so far, what we’ve seen has actually been better than expected. The margins are really holding back,” Janasiewicz said.
With third-quarter reports out of only about 14% of companies listed on the S&P 500 so far, analysts expect their profits to rise 33% from the year-ago quarter.
More than 85% of corporate results exceeded expectations, according to the latest data from Refinitiv.
The Dow Jones rose 0.43% to 35,609.34 points; the S&P 500 advanced 0.37%, to 4,536.19 points, and the Nasdaq Composite had a negative variation of 0.05%, to 15,121.68 points.
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