Executive Mosaic’s GovCon Index broke its losing streak as stocks made a resounding comeback. Wall Street flashed green as the batch of quarterly reports showed better profits and surpassed revenue expectations. The benchmark S&P 500 Index rose 0.73%, the Dow Jones Industrial Average gained 0.62%, and the Nasdaq Composite closed 0.93% higher.
Verizon Communications (NYSE: VZ) jumped 9.27% to register its most significant gain since October 2008. The American wireless network operator reported higher free cash flow and strong broadband subscriber growth. General Electric (NYSE: GE) and Coca Cola (Nasdaq: COKE) are also among the other big corporate names that popped.
RTX (NYSE: RTX) was the hottest GovCon Index ticker. The stock advanced 7.18% to $78.38 after the aerospace and defense conglomerate reported 3.3% adjusted earnings growth and 12% adjusted sales growth (to $19 billion) for the quarter that ended Sept. 30, 2023.
Besides a stock buyback program, RTX also announced selling its Cybersecurity, Intelligence and Services business for $1.3 billion to an unnamed buyer. More companies (30% of S&P 500) will report this week, including defense stocks Northrop Grumman (NYSE: NOC) and General Dynamics (NYSE: GD).
The bond market has been the biggest thorn to stocks, but the ten-year Treasury yield declined to 4.82% from 4.85% the previous day. Notably, based on the S&P Global Flash US Composite PMI report, the US private sector growth edged higher in October as inflationary pressures eased.
However, Chris Williamson, the Chief Business Economist at S&P Global Market Intelligence, said, “The tensions in the Middle East pose downside risks to growth and upside risks to inflation, adding fresh uncertainty to the outlook.”