Wall Street opens higher as GM, Boeing beat estimates

Traders crowd around a trading station for the Ferrari IPO near the opening of trading on the floor of the New York Stock Exchange October 21, 2015.  PHOTO: REUTERS
Traders crowd around a trading station for the Ferrari IPO near the opening of trading on the floor of the New York Stock Exchange October 21, 2015. PHOTO: REUTERS

NEW YORK (REUTERS) - U.S. stocks opened higher on Wednesday as investors cheered strong third-quarter results by industry heavyweights Boeing and General Motors.

Shares of General Motors rose 4 per cent to US$34.84, while Boeing rose 2 per cent to US$141.68, providing the biggest boost to the Dow.

Biogen rose 7.8 per cent to US$286.45 after it said it would cut 11 per cent of its workforce and reported better-than-expected results. The stock gave the biggest boost to the S&P 500 and Nasdaq composite indexes.

"During the course of the third quarter, we actually saw consensus estimates drop for both revenue and earnings," said Eric Weigand, senior portfolio manager at the Private Client Reserve at U.S. Bank. "You could make the point that there is a low hurdle for companies to exceed on these diminished expectations."

Of the S&P 500 companies that have reported results so far, 40 per cent have exceeded revenue estimates. About 60 per cent typically beat estimates in a quarter, according to Thomson Reuters data.

S&P 500 companies are expected to report a 3.9 per cent decline in third-quarter profit and a 3.8 per cent fall in revenue.

At 9:40 a.m. ET (940 pm Singapore time), the Dow Jones industrial average was up 34.25 points, or 0.2 per cent, at 17,251.36, the S&P 500 was up 2.75 points, or 0.14 per cent, at 2,033.52 and the Nasdaq composite index was up 6.29 points, or 0.13 per cent, at 4,887.26.

Eight of the 10 major S&P sectors rose, with the industrials sector's 0.5 per cent rise leading the advancers.

Coca-Cola fell 1.2 per cent to US$41.79 after its revenue missed estimates. American Express and eBay report after the close.

Adding to the upbeat mood on Wednesday were two large tech acquisitions.

Sandisk jumped 3.5 per cent to US$77.82 after it agreed to be bought by Western Digital in a US$19 billion deal.

KLA Tencor soared 23 per cent to US$66.30 after the semiconductor equipment maker agreed to be bought by Lam Research in a US$10.6 billion deal. Lam rose 9.2 per cent to US$76.57.

Ferrari rose as much as 17.2 per cent to $60.95 on its debut on the New York Stock Exchange. Fiat, which owns 90 per cent of Ferrari, fell 2 per cent to $15.60.

Chipotle fell 7.7 per cent to $651.22 a day after the burrito chain posted disappointing third-quarter results.