US stocks rise as more big cos report ‘encouraging’ earnings

NEW YORK, Aug 3, (AP): US stocks rose in afternoon trading on Wall Street Wednesday as investors reviewed another, mostly encouraging, batch of earnings from several big companies.

The S&P 500 rose 1.3% as of 12:01 p.m. Eastern. The Dow Jones Industrial Average rose 330 points, or 1%, to 32,732 and the Nasdaq rose 2.1%. The gains helped indexes recover most of this week’s losses. Technology companies, retailers and communications companies were some of the biggest winners. Sectors considered less risky, such as utilities and consumer goods makers, lagged the broader market.

Wall Street also received a surprisingly good report on a key part of the economy. The services sector, which makes up the bulk of the U.S. economy, unexpectedly grew in July, according to the Institute for Supply Management.

The yield on the 10-year Treasury rose to 2.78% from 2.73% late Tuesday. Earnings remain in focus this week as investors parse the latest results and statements from companies to better understand how inflation is affecting businesses and consumers.

Drugstore chain CVS rose 5.5% after reporting solid financial results and raising its profit forecast for the year. Starbucks rose 3.2% after also reporting solid financial results. Nearly three-quarters of companies within the benchmark S&P 500 have reported earnings for the latest quarter and the results have mostly beaten analysts’ forecasts.

Weak earnings

Several companies, though, have slipped amid disappointing results. Taco Bell owner Yum Brands fell 2.6% following a weak earnings report and online dating service company Match Group lost about a fifth of its value after giving investors a weak financial forecast.

PayPal jumped 9.6% on a report that activist investor Elliott Management has taken a large stake in the payment company.

Robinhood Markets, whose stock trading app helped bring a new generation of investors to the market, rose 14.2% following an announcement that it’s cutting nearly a quarter of its workforce. Crashing cryptocurrency prices and a turbulent stock market have kept more customers off its app.

Oil prices remained mostly steady following OPEC’s decision to boost production in September at a much slower pace than previous months.

Markets are also watching for potential economic fallout from China after U.S. House Speaker Nancy Pelosi’s visit to Taiwan. China claims self-ruled Taiwan as part of its territory, and banned imports of Taiwanese citrus fruits and frozen fish in retaliation for Pelosi’s visit. But it has avoided disrupting the flow of computer chips and other industrial goods, a step that could jolt the global economy.

Upcoming data on the jobs market could help investors determine how the Federal Reserve will move ahead with its interest rate policy, which has been aggressive in an effort to try and tame inflation. U.S. jobless claims numbers for last week will be released Thursday, and the government issues its July jobs report on Friday.

Europe

In midday trading in Europe, the London’s FTSE 100 inched up 0.1%, as did the DAX in Frankfurt. The CAC 40 in Paris moved 0.3% higher.

Asia

In Asian trading, the Shanghai Composite Index lost 0.7% to 3,163.67 while the Nikkei 225 in Tokyo rose 0.5% to 27,741.90. The Hang Seng in Hong Kong added 0.4% to 19,767.09.

Taiwan’s Taiex gained 0.2% to 14,777.02 after Beijing gave no sign it might disrupt industries such as Taiwanese producers of processor chips needed by Chinese factories that assemble the world’s smartphones.

The Kospi in Seoul advanced 0.9% to 2,461.54 while Sydney’s S&P-ASX 200 shed 0.3% to 6,975.90.

India’s Sensex lost less than 0.1% to 58,158.34. New Zealand and Southeast Asian markets rose.

U.S. markets finished lower Tuesday after the Labor Department said American employers posted fewer job openings than expected in June following interest rate hikes to cool surging inflation. U.S. jobless claims data for last week will be released Thursday and the government issues its July jobs report on Friday.

A going concern continues to be aggressive efforts by the Federal Reserve and other central banks to tame inflation with interest rate hikes that are meant to cool the economy that is in danger of overheating.

Some weak data on the U.S. economy has prompted a debate on whether the peak for inflation has passed. Even if true, it could point to a rising risk of recession.

The OPEC oil cartel and its allies were to meet Wednesday to decide how much crude to produce in September amid high oil prices and unstable energy supplies exacerbated by the war Russia has waged on Ukraine.

They also will be considering what effects staggering inflation and rising COVID-19 rates may have on global demand for fuel in the fall, with gasoline prices at the pump still high, though much lower than the $5 per gallon average the U.S. hit in June. The motor club AAA says the average price for a regular gallon of gas in the U.S. settled down to $4.16 on Wednesday.

At its last meeting, the OPEC+ coalition decided to boost production in August by 648,000 barrels per day. Some energy experts are expecting a similar production increase for September.

Benchmark U.S. crude gained 63 cents to $95.05 per barrel in electronic trading on the New York Mercantile Exchange. The contract rose 53 cents the previous day to $94.42. Brent crude rose 41 cents to $100.95 per barrel in London.

Currencies

The dollar gained to 133.31 yen from Tuesday’s 133.17 yen. The euro rose to $1.0192 from $1.0174.