By Medha Singh
(Reuters)-The U.S. stock market rose on Wednesday as data showed that the expansion of the service industry last month intensified optimism, which stemmed from Disney’s surprising quarterly profit and the optimistic performance of multiple healthcare companies.
The ISM’s non-manufacturing activity index rose from 57.1 in June to 58.1 last month, the highest level since March 2019.
Walt Disney Co. (N) shares surged 8.9%, setting a new high in more than five months. Revenues from its parks and media network fell less than expected.
Sam Stovall, chief investment strategist at CFRA Research in New York, said: “Disney’s performance has helped the market continue to grow. Overall, earnings have been better than expected.” Pharmacy operator and health insurance company CVS Health Corp (N:) exceeded the quarter. Profit expectations have been raised for the full year, and Humana Inc (N:) and drug maker Regeneron Pharmaceuticals Inc (O:) have also released earnings that exceeded expectations.
Johnson & Johnson (N:) rose 0.7%. The company said the US government will pay more than $1 billion for the purchase of 100 million doses of coronavirus vaccine.
Better-than-expected corporate performance, coupled with the soaring share prices of heavyweight technology companies, stimulated a stimulating rebound in major Wall Street indexes, causing the S&P 500 Index to fall to within 2.5% of its record high in February.
Earlier in the day, the ADP “National Employment Report” showed that private employment increased by 167,000 in July, far below the 1.5 million new additions expected by economists. The ADP report is considered the predecessor of Friday’s monthly employment report.
Investors have been worried about signs that US economic activity has stalled due to the surge in COVID-19 infections in parts of the country, increasing the possibility of seeking more financial assistance.
White House negotiators vowed on Tuesday to work “round the clock” with Congressional Democrats to reach an agreement on a coronavirus mitigation plan before the end of this week.
Financial, industrial and materials stocks that track economic growth outperformed the major S&P sectors.
The energy sector rose the most, as oil prices hit their highest price since early March. [O/R] At 10:15 AM Eastern Time, the Dow Jones Industrial Average () rose 252.77 points, or 0.94%, to 27,081.24, and the S&P 500 Index () rose 19.19 points, or 0.58%, to 3,325.70. The Nasdaq Composite Index rose 39.58 points, or 0.36%, to 10,980.74.
Electric truck maker Nikola Corporation (Nikola Corporation) fell 10.1% after the company announced that its first quarter results as a listed entity had a larger quarterly loss.
The ratio of rising stocks to falling stocks on the New York Stock Exchange was 2.57:1, and the ratio of rising stocks on the Nasdaq market was 1.80:1.
The Standard & Poor’s Index recorded 40 new 52-week highs and no new lows, while the Nasdaq recorded 168 new highs and seven new lows.
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