Stocks Hit Fresh Highs Ahead of the Fed As Earnings Pump Optimism: Stock Market Today

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Stocks opened modestly higher Tuesday thanks to the latest batch of corporate earnings reports. Optimism ramped up in afternoon trading, with all three main benchmarks finishing the day at new record highs.

At the close, the blue-chip Dow Jones Industrial Average was up 0.3% at 47,706, the broader S&P 500 had added 0.2% to 6,890, and the tech-heavy Nasdaq Composite had gained 0.8% to 23,827.

This is the busiest week for the third-quarter earnings calendar so far, and this morning, several blue chip stocks released their quarterly results.

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Among them was Sherwin-Williams (SHW), which reported higher-than-expected third-quarter earnings and revenue and reiterated its full-year forecast. Shares jumped 5.5% as a result – adding to their long-term returns – which made SHW the best Dow Jones stock today.

UnitedHealth pops on Q3 earnings beat

UnitedHealth Group (UNH) was also near the top of the Dow Tuesday, rising 0.5% after the health care giant's beat-and-raise quarter.

It's been a rough year for the health insurer – both on and off the price charts. In addition to managing rising Medicare costs and a Department of Justice investigation into its billing practices, UNH's CEO, Andrew Witty, stepped down in May.

And while the company's upwardly revised full-year earnings outlook of $16.25 per share is notably lower than its year-ago results ($27.66 per share), new CEO, Stephen Hemsley, who previously served in the role from 2006 to 2017, said he is "confident" UNH "will return to solid earnings growth next year."

As for its share price, UnitedHealth was down more than 50% for the year to date through late July. However, shares are up nearly 50% since then, thanks in part to news that Warren Buffett's Berkshire Hathaway (BRK.B) took a stake in the embattled health care stock in the second quarter.

UPS reports earnings beat as reorganization efforts pay off

United Parcel Service (UPS) was another notable post-earnings gainer, jumping 8.0% after the logistics firm reported better-than-expected third-quarter earnings of $1.74 per share on $21.4 billion in revenue.

UPS credited restructuring plans for its strong results. In addition to cutting roughly 48,000 jobs this year, it closed daily operations at more than 90 leased or owned buildings. These efforts resulted in $2.2 billion in cost savings through September 30.

"We are executing the most significant strategic shift in our company's history, and the changes we are implementing are designed to deliver long-term value for all stakeholders," said UPS CEO Carol Tomé in the earnings release.

Amazon layoffs send stock higher

Elsewhere on Wall Street, Amazon.com (AMZN) rose 1.0% after the e-commerce giant said it is laying off roughly 14,000 corporate employees– though a Reuters report puts the number closer to 30,000.

In June, Amazon CEO Andy Jassy said in a memo to employees that the company's embrace of generative artificial intelligence (AI) will "change the way our work is done. We will need fewer people doing some of the jobs that are being done today, and more people doing other types of jobs."

And in a memo sent earlier today, Amazon said that as a result of this "transformative technology," the company needs "to be organized more leanly, with fewer layers and more ownership, to move as quickly as possible for our customers and business."

The news comes ahead of Amazon's third-quarter earnings announcement, which is due out after Thursday's close.

Jefferies analyst Brent Thill expects "overall solid numbers" for Amazon's Q3 results, which, when "combined with an improving Amazon Web Services [the company's cloud segment outlook," could give the mega-cap stock a lift.

As for Amazon's retail business, Thill thinks that "resilient macro & consumers as well as efficient marketplace dynamics on Amazon should help offset headwinds from tariffs and value-oriented buying."

Big Tech earnings, Fed meeting on deck

There are a few Big Tech reports to get through ahead of Amazon's earnings event; namely, Alphabet (GOOGL), Meta Platforms (META) and Microsoft (MSFT), which all report after Wednesday's close.

MSFT made a notable move today, becoming just the second company ever – Nvidia (NVDA) being the first – to close with a $4 trillion market cap.

And before these mega-cap earnings start to roll in, Wall Street will get the latest Federal Open Market Committee policy decision. Indeed, the October Fed meeting will wrap up tomorrow afternoon, with the central bank widely expected to issue its second straight rate cut.

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