Solid Earnings Keep All-Times Highs in Play

U.S. markets settled higher following the “official” start to the 3Q earnings season, which saw better than expected results from the Healthcare and Financial sectors. The solid start to the earnings season trumped concerns about a report that China aims to have the U.S. roll-back some existing tariffs before committing to added agricultural purchases.

The major indexes once again pushed near-term resistance levels with the technical picture improving following the 4th day of gains in the past 5 sessions. Volatility also settled below another milestone and is signaling continued market momentum.

The Russell 2000 was higher by 1.2% following the 2nd half push to 1,528 and 3rd-straight close above the 1,500 level. Prior and lower resistance at 1,515-1,530 and the 50-day moving average was cleared and held with a close above the latter and the 200-day MA getting 1,545-1,560 back in play.

The Nasdaq also gained 1.2% after testing an afternoon high of 8,166. Prior and lower resistance from mid-September at 8,150-8,200 was breached but held by just over a point with a close above the latter getting mid-July hurdles at 8,250-8,300 in focus.

The S&P 500 soared 1% following the midday run to 3,003. Upper resistance from early last month at 2,975-3,000 was cleared and held with fresh hurdles at 3,025-3,050 and the record peak at 3,027 on continued closes above the 3,000 level.

The Dow jumped 0.9% after testing an intraday high of 27,120. Fresh and lower resistance from early September at 27,000-27,200 was cleared and held with a close above the latter signaling additional strength towards 27,400-27,600 with the all-time high from July at 27,398.

Healthcare and Communication Services were the strongest sectors after rallying 1.8% and 1.7%, respectively, while Financials and Technology advanced 1.4% and 1.1%. Consumer Staples and Utilities were the only sectors that showed weakness after falling 0.4% and 0.3%, respectively.