Stock Market Today: Goldman Earnings Give Stocks a Boost

Meanwhile, the NAHB housing market index fell sharply in October.

blue stock market chart
(Image credit: Getty Images)

Stocks closed higher for a second straight day as the latest batch of third-quarter earnings rolled in.

Goldman Sachs (GS (opens in new tab), +2.3%) continued a trend seen in big bank earnings recently, reporting higher-than-expected top- and bottom-line results for its third quarter. Defense contractor Lockheed Martin (LMT (opens in new tab)) was another post-earnings winner, climbing 8.8% after Q3 profit came in higher than expected.

On the economic front, the National Association of Home Builders (NAHB) housing market index, which measures sentiment among homebuilders, fell to 38 in October from September's reading of 46. This came in well below economists' consensus forecast of 43 and helped alleviate some of the anxiety over the Fed's rate-hike plans

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"The U.S. housing market is the most interest-sensitive sector of the economy and the housing market is reflecting the strong increase in interest rates engineered by the Federal Reserve," says Eugenio Alemán, chief economist at Raymond James. "Higher mortgage interest rates are doing what they are expected to do: reduce the pool of potential homebuyers and weaken the U.S. housing market."

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While the major market indexes finished well off their intraday highs, they still ended the day with solid gains. The Dow Jones Industrial Average closed up 1.1% at 30,523, the S&P 500 Index gained 1.1% to 3,719, and the Nasdaq Composite added 0.9% to 10,772.

Can the Rally Keep Going? The Charts Say Yes.

So how long will this rebound last? No one knows for certain, but there are several reasons to believe the rally could have legs. For one, the October-to-December period is a historically positive one for stocks. Since 1928, the S&P 500 has averaged gains of 0.5% in October, 0.8% in November and 1.4% in December, according to Yardeni Research. 

Plus, midterm election years tend to be bullish for the stock market – no matter who wins in Congress. What's more, technical analysis, or the study of charts, is hinting at more upside to come. "While economic conditions have not changed – and therefore do not warrant a shift in the cyclical outlook – technical conditions are pointing to a potential rebound," BCA Research says in a note to clients. Read on to see what else they and other technical strategists are saying about the stock market's recent run higher.

Karee Venema
Contributing Editor, Kiplinger.com

With over a decade of experience writing about the stock market, Karee Venema is an investing editor and options expert at Kiplinger.com. She joined the publication in April 2021 after 10 years of working as an investing writer and columnist at Schaeffer's Investment Research. In her previous role, Karee focused primarily on options trading, as well as technical, fundamental and sentiment analysis.