(Reuters) – U.S. stocks ticked higher in thin trading on Tuesday, supported by strong earnings and a rebound in technology stocks from a two-day selloff, while investors braced for the outcome of U.S. midterm elections.
Traders work on the floor of the New York Stock Exchange (NYSE) in New York, U.S., November 5, 2018. REUTERS/Brendan McDermid
Polls point to President Donald Trump’s Republican party losing control of the House of Representatives, which could curb some of his policymaking power.
A political gridlock between the White House and Congress could hinder Trump’s pro-business agenda and raise concerns about political instability, but most analysts say this may not be the worst outcome for equities.
“What you are looking at is a really thin market ahead of the elections. Volumes are 22 percent below their 20-day moving average,” said Michael Antonelli, managing director, institutional sales trading at Robert W. Baird in Milwaukee.
“People are picking through the carnage of tech and that’s why the markets spiked really quick.”
Apple (AAPL.O) rose 1.1 percent, after its biggest two-day loss since January 2013, helping the beaten-down technology sector .SPLRCT gain 0.74 percent.
The materials sector .SPLRCM got a boost from strong results from Mosaic Co (MOS.N) and FMC Corp (FMC.N), which rose 6.8 percent and 2.8 percent, respectively.
The trade sensitive industrial sector .SPLRCI rose 0.69 percent after Chinese Vice President Wang Qishan said Beijing was ready to hold discussions and work with the United States to resolve trade disputes.
At 10:23 a.m. EDT the Dow Jones Industrial Average .DJI was up 50.37 points, or 0.20 percent, at 25,512.07, the S&P 500 .SPX was up 10.65 points, or 0.39 percent, at 2,748.96 and the Nasdaq Composite .IXIC was up 54.99 points, or 0.75 percent, at 7,383.84.
Mylan NV (MYL.O) jumped 12.9 percent after the drugmaker beat analysts’ estimates for third-quarter profit.
Pharmacy chain CVS Health Corp (CVS.N) was up about 2.9 percent after its quarterly profit beat analysts’ estimates on higher sales of prescription drugs and consumer health and beauty products.
Booking Holdings (BKNG.O) gained 6.3 percent after the online travel agency forecast fourth-quarter profit above estimates.
Advancing issues outnumbered decliners by a 1.42-to-1 ratio on the NYSE and a 1.49-to-1 ratio on the Nasdaq.
The S&P index recorded 11 new 52-week highs and one new lows, while the Nasdaq recorded 27 new highs and 29 new lows.
Reporting by Sruthi Shankar in Bengaluru; Editing by Anil D’Silva