Day Traders Diary

11/2/21

The major averages rose again with the S&P 500 rising to a new record high ahead of a key Federal Reserve decision and strong corporate earnings. The Dow Jones Industrial Average rose 138 points to 36,052. The S&P 500 added 16 points or 0.4% to 4,630, closing at an all-time high. The tech-focused Nasdaq Composite gained 53 points or 0.3% to 15,6449. This is the third session in a row that all three major averages closed at a record.

The small cap benchmark Russell 2000 rose slightly to close at an all-time high.

Pfizer shares rose 4.2% after the drug maker's third-quarter profit topped expectations. It also raised its 2021 revenue and EPS outlook.

Under Armour shares soared 16.3% after the athletic retailer hiked its annual outlook, revealing the company is seeing progress in improving its brand image under CEO Patrik Frisk.

DuPont de Nemours rallied 8.8% after beating on the top and bottom lines of its quarterly results and Estee Lauder popped 4.1% on better-than-expected earnings and revenue.

Meanwhile, Tesla shares cooled off Tuesday after popping during the end of October. Shares of the electric automaker dipped 3%, though they are up more than 50% over just the past month. The drop follows a report that the carmaker is recalling 11,700 of its vehicles due to a communications error, and a tweet from company founder Elon Musk that Tesla has yet to sign a contract with rental giant Hertz.

Better-than-expected corporate earnings results boosted the U.S. stock averages to finish October at record highs, with the S&P 500 and Nasdaq posting their best months since November 2020.

As of Tuesday at the close, according to FactSet, 83% of S&P 500 companies that have reported earnings have topped analysts' earnings expectations.

All three major U.S. stock indexes closed at records during on Monday as investors continue to bet on a year-end rally despite supply chain issues, Covid risk and a Federal Reserve that's about to indicate it's going to pull back on some stimulus. The Fed's two-day meeting begins Tuesday.

The S&P 500 has averaged gains of 1.1% in November and 2.3% in December since 1936, notes Bank of America. The final month of the year is in the green 79% of the time, the firm notes. However, Bank of America is cautious.

The Fed at the conclusion of its two-day meeting on Wednesday is expected to announce it will begin unwinding its $120 billion in monthly bond purchases implemented during the pandemic.

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