People wearing face masks walk by the New York Stock Exchange (NYSE) during the outbreak of the coronavirus disease (COVID-19) in New York City, New York, U.S., July 19, 2021. REUTERS/Andrew Kelly

July 21 (Reuters) – The S&P 500 and Dow indexes were set to rise on Wednesday as upbeat quarterly results from companies including Johnson & Johnson and Coca-Cola reignited optimism about the health of corporate America.

Johnson & Johnson (JNJ.N) gained 1.2% in premarket trading after the drugmaker forecast upbeat 2021 earnings, while Harley-Davidson Inc (HOG.N) added 1.8% as it reported abetter-than-expected quarterly profit. read more

Coca-Cola Co (KO.N) rose 2.6% after boosting its full-year sales forecast, while health insurer Anthem Inc (ANTM.N) added 1.3% on raising its 2021 earnings target. read more

“Everybody knows this is going to be the biggest year-over-year growth rate for earnings in the second quarter,” said Tom Martin, senior portfolio manager at GLOBALT Investments.

Wall Street ended sharply higher on Tuesday, rebounding from a multi-day losing streak, as a string of upbeat earnings reports and revived economic optimism fueled a risk-on rally.

“There-is-no-alternative (TINA) and fear-of-missing-out (FOMO) are driving the market higher. Every time there’s a dip in the market, people think that’s the opportunity to put more money to work,” Martin said.

Still, a weak subscriber growth projection by Netflix Inc (NFLX.O), the first to report earnings from the FAANG group, pushed its shares down 0.7% and set the teach-heavy Nasdaq (.IXIC) for a lower open.

Analysts expect annual S&P earnings growth of 72.9% for the April-June period, a significant improvement over the 54% growth seen at the beginning of the quarter, according to Refinitiv data.

Market participants are also closely watching the second-quarter earnings season to justify sky-high valuations at which the market trades right now.

For the year so far, the benchmark S&P 500 index (.SPX) has gained 15.1% on optimism about a stronger recovery due to vaccinations and favorable monetary policy.

Energy stocks Chevron Corp (CVX.N), Exxon Mobil (XOM.N), Schlumberger NV (SLB.N), Occidental Petroleum (OXY.N), Marathon Oil (MRO.N), and Halliburton (HAL.N) climbed between 1.2% and 3.2%, tracking higher oil prices.

United Airlines (UAL.O) rose 1.6% after its revenue quadrupled from a year ago and topped estimates with a strong domestic travel rebound. read more

Rivals American Airlines (AAL.O) and Southwest Airlines (LUV.N) added 1.2% and 1.4%, respectively, ahead of their results on Thursday.

Rate-sensitive lenders Morgan Stanley (MS.N), Wells Fargo & Co (WFC.N), Citigroup (C.N), Goldman Sachs (GS.N), Bank of America Corp (BAC.N) and JPMorgan & Chase (JPM.N) were up over 1% each.

At 8:38 a.m. ET, Dow e-minis were up 142 points, or 0.41%, S&P 500 e-minis were up 9.25 points, or 0.21%, and Nasdaq 100 e-minis were down 19.75 points, or 0.13%.

Chipotle Mexican Grill Inc (CMG.N) jumped 4.6% as brokerages raised their price targets on the burrito chain’s stock after it beat estimates for earnings and comparable quarterly sales. read more

Reporting by Devik Jain and Shreyashi Sanyal in Bengaluru; editing by Uttaresh.V and Maju Samuel

Our Standards: The Thomson Reuters Trust Principles.

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