Wall Street up for sixth straight session on earnings, healthcare

NEW YORK (Reuters) - U.S. stocks rose on Tuesday as a host of solid earnings reports, along with strength in the healthcare sector, helped lift the S&P 500 and Nasdaq to their sixth straight advance.

Netflix Inc surged 7 percent to $372.90 a day after showing strong subscriber growth, a sign the trading favorite still had room to grow despite recent concerns over its valuation. With the day's gain, the stock moved to the plus side for the year after a 21 percent drop in March.

Healthcare <.SPXHC>, up 1 percent, was the best performing of the 10 major S&P sectors. Allergan Inc jumped 15.2 percent to $163.65 a day after activist investor William Ackman teamed up with Canadian drugmaker Valeant Pharmaceuticals International Inc to bid for the company. U.S.-listed Valeant shares gained 7.5 percent to $135.41.

Also providing support to the sector was a deal between Novartis and GlaxoSmithKline , in which the two traded over $20 billion worth of assets in an effort to cope with healthcare spending cuts and generic competition. U.S.-listed shares of Novartis gained 1.3 percent to $85.56, while Glaxo advanced 4.1 percent to $55.30.

Better-than-expected earnings have lifted equities recently, though companies have largely been exceeding reduced forecasts. Profits are seen rising 1.1 percent this quarter, down from the 6.5 percent growth rate estimated at the start of the year.

"What was baked into the market, in spite of a market near an all-time high, was a sloppy earnings season," said Mike Serio, regional chief investment officer for Wells Fargo Private Bank in Denver.

"We've had some really good beats at this point, we've had a couple of good announcements today, you throw on the M&A activity in the drug sector, at least in the short term, everybody looks pretty excited about this market."

Dow components Travelers Cos Inc and United Technologies Corp both beat expectations, and United Tech raised the low end of its full-year profit outlook. Shares of Travelers rose 0.6 percent to $86.89 while United Tech added 0.8 percent at $119.19.

McDonald's Corp reported earnings that fell alongside a drop in U.S. same-store sales, and its shares slipped 0.4 percent to $99.32.

With 20 percent of the S&P having reported through Tuesday morning, 63 percent have topped earnings expectations, according to Thomson Reuters data, matching the long-term average. On the revenue side, 51 percent have exceeded forecasts, below the 61 percent long-term average.

The Dow Jones industrial average <.DJI> rose 65.12 points or 0.4 percent, to 16,514.37, the S&P 500 <.SPX> gained 7.66 points or 0.41 percent, to 1,879.55 and the Nasdaq Composite <.IXIC> added 39.912 points or 0.97 percent, to 4,161.458.

In another positive sign for equities, the Dow Jones Transportation average <.DJT>, up 0.6 percent, closed at its first record high since April 2. The index got a boost from airlines such as United Continental Holdings , up 4.6 percent, and Alaska Air Group Inc , up 1.3 percent, which moved higher on a 2-percent drop in oil prices.

Facebook Inc shares rose 2.9 percent to $63.03 and helped boost the Nasdaq 100 <.NDX> and S&P 500. Credit Suisse upgraded the social networking company to "outperform" on higher expectations for the company's long-term average revenue per user.

Volume was light, with about 5.71 billion shares traded on U.S. exchanges, below the 6.7 billion average so far this month, according to data from BATS Global Markets.

Advancing stocks outnumbered declining ones on the NYSE by 2,226 to 811, while on the Nasdaq, advancers beat decliners 1,900 to 727.

(Reporting by Chuck Mikolajczak; Editing by Nick Zieminski)

WhatsAppFacebookTwitterLinkedinBeloudBluesky