Key Takeaways

• The S&P 500 added 0.5% on Wednesday, Oct. 16, 2024, driven by upbeat earnings reports and a rebound among semiconductor stocks.

• United Airlines shares took off after the company topped quarterly estimates and announced a $1.5 billion share buyback plan.

• Shares of KLA and Applied Materials extended losses following a disappointing outlook from semiconductor equipment peer ASML.

Major U.S. indexes gained ground Wednesday as investors reacted to strong earnings reports and semiconductor stocks bounced back after stumbling in the previous session.

The S&P 500 added 0.5%, ending just below the all-time closing high posted Monday. A 0.8% gain lifted the Dow to a record close, while the Nasdaq advanced 0.3%.

United Airlines (UAL) shares soared 12.4%, posting Wednesday's top performance in the S&P 500, after the carrier reported better-than-expected sales and profits for the third quarter. United also announced plans to repurchase $1.5 billion worth in stock. Shares of rival carrier Delta Air Lines (DAL) climbed 6.8%.

A strong earnings report also helped lift shares of Morgan Stanley (MS), which jumped 6.5%. The financial services giant posted year-over-year gains in revenue and profits, exceeding analysts' forecasts, with an uptick in net interest income (NII) versus the prior-year period. Morgan Stanley also reduced its provision for credit losses (PCL), distinguishing itself from some of its more consumer-focused banking rivals that have had to increase their cushion against potential losses.

Walgreens Boots Alliance (WBA) shares were up 6.2%, adding to gains posted in the previous session after the drugstore operator beat quarterly estimates and announced a turnaround plan, which includes closing 1,200 underperforming stores.

Shares of life sciences firm Agilent Technologies (A) dropped 3.8%, losing the most of any S&P 500 constituent on Wednesday. Although Barclays analysts raised their price target on Agilent stock to $145 from $135, they maintain an "underweight" rating. Analysts previously indicated that the laboratory diagnostics provider faces a difficult competitive environment and potential challenges related to integrating recently acquired contract drug manufacturer Biovectra.

Shares of semiconductor equipment manufacturers extended losses after ASML (ASML) released underwhelming results and guidance Tuesday. Shares of KLA (KLAC) slid 3.6%. Applied Materials (AMAT) shares declined 3.4% as investment research firm Hedgeye added the stock as a new short idea, anticipating wafer fabrication equipment (WFE) growth could fall short of consensus expectations.

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