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Major stock indexes

All three U.S. major stock-market indexes were moving away from their intraday records on Monday afternoon, with investors awaiting this week’s pivotal Federal Reserve meeting.

What are major indexes doing?
The Dow Jones Industrial Average DJIA, +0.18% rose 41 points, or 0.1%, to 35,862.09. The blue-chip gauge traded as high as 36,009.74, topping the 36,000 milestone for the first time.
The S&P 500 SPX, -0.06% toggled between gains and losses at around 4,600.82 after trading at a record intraday peak.
The Nasdaq Composite COMP, +0.15% rose 35 points, or 0.2%, to 15,533.94, also hitting an intraday record.
On Friday, the Dow, S&P 500 and Nasdaq Composite all closed at records. Last month’s 7% rise for the S&P 500 was the best since November 2020, after the U.S. election and Pfizer’s announcement of the results of a study into its COVID-19 vaccine.

What’s driving markets?
The backdrop for the stock market’s gains have been impressive earnings. According to Credit Suisse, earnings by S&P 500 companies have beaten estimates by 10% in the third quarter.

“Earnings have been more positive than feared early in the month, which we believe broadly explains the positive move in equities this month, but upside is clearly less than the prior three quarters,” said Tavis C. McCourt, a strategist at Raymond James, in a note.

McCourt noted that in the three previous quarters, 2021 consensus earnings per share for the S&P 500 was boosted by around $10 each earnings season. This season is on track for a rise of around $3 to $4, taking it from roughly $199 to $203 a share. “That is still very strong historically, but it also shows the meaningful sting of supply-chain shortages,” he said.

UBS Global Wealth Management is one of the firms sticking by its expectations for a favorable outlook and earnings that drive further market gains.

“We remain comfortable with our expectation for S&P 500 profit growth of 45% this year,” said Solita Marcelli, chief investment officer for the Americas at UBS Global Wealth. “Our outlook for continued earnings growth in 2022 is a key driver our expectations for further equity market gains. Our S&P 500 target for December 2022 is 5,000.”

Investors will have plenty of results to sift through again this week, with 167 S&P 500 companies expected to report, a similar number to last week as the peak of earnings season continues. Among the highlights will be results from drugmakers Pfizer Inc. PFE, -0.33% and Moderna Inc. MRNA, -3.60%.

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