Wall Street climbs as tech giants rebound
Market turbulent as investors review heavy batch of earnings
NEW YORK, April 28, (AP): Stocks rose in morning trading on Wall Street Thursday as technology companies clawed back some of the ground they had lost recently.
Major indexes are still headed for weekly losses and a dismal monthly performance after sliding for much of April. This week has been especially turbulent as investors review a heavy batch of corporate earnings from major tech companies, industrial firms and retailers.
The S&P 500 rose 0.7% as of 10:19 a.m. Eastern. The Dow Jones Industrial Average rose 111 points, or 0.3%, to 33,413 and the Nasdaq rose 0.7%.
Big Tech and communications companies have been behind much of the oscillations in the broader market as their pricey stock values have more force in pushing the major indexes up or down.
Apple, which reports its latest financial results later Thursday, rose 2.7%. Chipmaker Qualcomm jumped 5.8% after easily beating Wall Street’s profit estimates. Facebook’s parent company Meta surged 13.3% after it beat Wall Street’s first-quarter profit forecasts and reported an encouraging increase in daily users.
Encouraging financial reports helped support gains for several other major companies. McDonald’s rose 2.1% following a strong earnings update. Southwest Airlines rose 1.7% after reporting solid revenue and telling investors it expects a profitable year as travel demand returns with the pandemic fading.
Bond yields gained ground. The yield on the 10-year Treasury rose to 2.86% from 2.81%.
The latest round of corporate report cards are hitting the market as Wall Street tries to figure out how rising inflation is impacting businesses and consumer spending.
Supply chain issues have been crimping business operations in many industries throughout the recovery from the pandemic and Russia’s ongoing war against Ukraine has worsened increases for energy and key food commodity prices. Strict COVID-19 lockdown measures in China have added to concerns about slowing growth.
The U.S. Federal Reserve is set to aggressively hike rates as it steps up its fight against inflation. The chair of the Fed has indicated the central bank may hike short-term interest rates by double the usual amount at upcoming meetings, starting next week. It has already raised its key overnight rate once, the first such increase since 2018.
The Commerce Department on Thursday reported that the U.S. economy shrank last quarter for the first time since the pandemic recession struck two years ago. But the report showed that consumers and businesses kept spending, despite rising inflation, in a sign of underlying resilience.
Consumer spending is being closely watched as a gauge for the broader economy, as everything from food to clothing and gas becomes more expensive. Internet retail giant Amazon will report its results later Thursday, giving Wall Street another measure of how retailers and consumers are reacting to higher prices. Investors will also get another update on spending Friday when the Commerce Department releases its personal income and spending report for March.
Germany’s DAX jumped 1.7% to 14,024.01 while the CAC 40 in Paris added 1.7% to 6,555.55. Britain’s FTSE surged 0.8% to 7,484.85. The future for the S&P 500 climbed 1.5% while the Dow future was up 0.9%.
Shares advanced in Asia after the Bank of Japan kept its near-zero interest rate stance unchanged.
Tokyo’s Nikkei 225 rose 1.8% to 26,847.90 on stronger-than-expected retail sales data. However, the Japanese central bank downgraded its outlook for the world’s third-largest economy to take into account rising energy costs and uncertainties raised by Russia’s invasion of Ukraine.
The dollar rose to 130.60 Japanese yen from 128.43 yen late Wednesday. It started the year at about 115 yen and has risen much faster than earlier estimates on expectations the U.S. Federal Reserve will aggressively raise interest rates to counter surging inflation. That has prompted investors to sell yen to seek higher returns in dollar-denominated assets.
The euro slipped to $1.0545 from $1.0560.
Some Japanese officials have expressed concern over the yen’s weakness at a time when costs for imported oil, gas and other commodities are soaring. But the Bank of Japan has indicated it intends to keep lending conditions ultra-lax to help support the sluggish economy.
In its summary of the outlook for the economy, the BOJ said the chief risks were coronavirus outbreaks and “extremely high uncertainties over developments in the situation surrounding Ukraine and the associated developments in commodity prices, global financial and capital markets, and overseas economies.”
Chinese benchmarks were higher amid a flurry of official commentary highlighting the ruling Communist Party’s efforts to counter the impact of pandemic shutdowns in many cities.
The Shanghai Composite index gained 0.6% to 2,975.48 and Hong Kong’s Hang Seng jumped 1.5% to 20,238.22.
Strict COVID-19 lockdown measures in China have added to concerns about slowing growth, disrupting the flow of industrial goods and other business activity in Shanghai, home of the world’s busiest port, and other industrial cities including Changchun and Jilin in northeast China.
Beijing has been conducting mass testing this week as it decides on what degree of controls to impose in the capital.
Elsewhere, the Kospi in Seoul added 1.1% to 2,667.49. Australia’s S&P/ASX 200 surged 1.3% to 7,356.90.