Investors cheer for corporate profits, Dow spikes 548 points

Stocks posted sharp gains on Tuesday, Oct. 16, getting a boost from better-than-expected earnings from investment banks Morgan Stanley (MS – Get Report) and Goldman Sachs Group Inc. (GS – Get Report)  .

The Dow Jones Industrial Average rose 547 points, or 2.2%, to 25,798.42, the S&P 500 gained about 2.2%, and the Nasdaq jumped 2.9%. Alphabet Inc. (GOOGL – Get Report) rose 2.8% and Amazon.com Inc. (AMZN – Get Report) was up 3.4%.

Dow component Walmart Inc. (WMT – Get Report)  lowered its earnings guidance for 2019 and said comparable U.S. store sales would grow at a slower-than-expected rate as it continued to count the cost of its $16 billion acquisition of a majority stake in India’s Flipkart earlier this year. Walmart shares, however, rose 2.1%.

Walmart, the world’s largest retailer, said its sees GAAP earnings per share for fiscal 2019 in the range of $2.65 to $2.80, down from a previous forecast of $2.90 to $3.05, a figure that reflects a dilution of 25 cents a share from the Flipkart deal. Comparable U.S. sales, the company said, will rise between 2.5% and 3% next year, down from a previous forecast of around 3%. Online sales, which are crucial for the group’s ambitions to challenge Amazon in international markets, will likely grow by 35% over its 2020 fiscal year, the company said.