Stocks rallied on Thursday after two tech stocks, AT&T and IBM, posted strong earnings reports, boosting investors’ confidence. The Dow Jones Industrial Average gained 200 points, or 0.7%, during trading on Thursday morning, while the S&P 500 and the Nasdaq Composite rose 0.5% and 0.9%, respectively.
IBM reported on Wednesday that earnings were $1.81 per share during the quarter, above the $1.77 per share expected by analysts, according to Refinitiv. Meanwhile, revenue reached $14.11 billion, beating analyst expectations of $13.51 billion, per Refinitiv.
“With our year-to-date performance, we now expect full-year revenue growth above our mid-single digit model,” said IBM CEO Arvind Krishna in the company’s earnings statement.
AT&T reported on Thursday third-quarter adjusted earnings of $0.68 per share, beating the analyst consensus on FactSet of $0.61. The telecommunication giant’s adjusted earnings before interest, taxes, depreciation, and amortization for Q3 was $10.7 billion, above analysts’ expectations of $10.45 billion for the quarter. Revenue for the quarter was $30 billion, above expectations of $29.85 billion.
Shares for AT&T and IBM on Thursday morning went up 9% and 4.5%, respectively, after the companies outperformed quarterly earnings estimates.
AT&T and IBM are two of the top five holdings in the American Century STOXX U.S. Quality Value ETF (NYSE Arca: VALQ) as of September 30. VALQ tracks the iSTOXX® American Century® USA Quality Value Index, which tries to identify undervalued large-cap companies with stronger financial fundamentals relative to rivals. The index screens stocks based on value, quality, and income.
“Value securities had been more attractively valued, tend to offer higher dividend yields (which helps contribute to their shorter duration profile than growth stocks where most of the return is due to price appreciation) and have recently experienced stronger momentum vs. growth,” said Sandra Testani, vice president of ETF product and strategy for American Century Investments.
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