Wall Street gets a boost from promising profit reports
Wall Street is back to climbing today following more encouraging profit reports and the latest signal that inflation is loosening its chokehold on the economy, the Associated Press reports.
The S&P 500 was 0.8% higher in early trading, near its highest level in more than 15 months. The Dow Jones Industrial Average was up 174 points, or 0.5%, at 35,347 after breaking a 13-day winning streak the day before. The Nasdaq composite was 1.4% higher.
Stocks have been rallying hard recently on hopes high inflation is cooling enough to get the Federal Reserve to stop hiking interest rates. That in turn could allow the economy to continue growing and avoid a long-predicted recession.
Critics, though, say the stock market’s rally may have gone too far, too fast. The full effects of the Fed’s rate hikes have yet to make their way fully through the system. Other parts of the economy could still ultimately crack under the pressure; the three high-profile failures of U.S. banks in the spring were proof.
Still, hopes for a halt to rate hikes were helping tech stocks, high-growth companies, and others seen as big beneficiaries from easier rates to rally and lead the market Thursday.
Microsoft, Apple, and Amazon each rose more than 1% and were three of the strongest forces pushing upward on the S&P 500.
Companies also continue to deliver stronger profits for the spring than analysts expected. Roughly halfway through the earnings season, more companies than usual are topping profit forecasts, according to FactSet.
Intel rose 4% after reporting a profit for the latest quarter, when analysts were expecting a loss. Food giant Mondelez International climbed 4.5% after reporting stronger results for the spring than expected. The company behind Oreo and Ritz also raised its forecasts for financial results for the full year.
On the losing side was Ford. It fell 3.9% despite reporting much stronger profit for the spring than expected.
In the bond market, the yield on the 10-year Treasury fell to 3.97% from 4.00% late Thursday. It helps set rates for mortgages and other important loans. The two-year Treasury, which moves more on expectations for what the Federal Reserve will do, slipped to 4.90% from 4.92%.