Wall Street climbs to kick off a big week for earnings reports

NEW YORK (AP) — U.S. stocks climbed Monday and clawed back a chunk of their losses from last week, which was the worst for the S&P 500 in more than a year.

The S&P 500 rose 0.9% to recover more than a quarter of last week’s rout. The Dow Jones Industrial Average added 253 points, or 0.7%, and the Nasdaq composite jumped 1.1%.

The rally was widespread, and most stocks across Wall Street rose. In the S&P 500, technology stocks led the way to bounce back from their worst week since the COVID crash of 2020.

Nvidia leaped 4.4%, and Alphabet climbed 1.4% as Treasury yields stabilized in the bond market. Last week, a jump in yields cranked up the pressure on stocks, particularly those seen as the most expensive and making their investors wait the longest for big growth.

Bank stocks were also strong following some encouraging profit reports. Truist Financial rallied 3.4% after its profit for the start of the year topped analysts’ expectations.

They helped offset a 3.4% drop for Tesla, which announced more cuts to prices over the weekend. Elon Musk’s electric-vehicle company has seen its stock drop more than 40% already this year, and it will report its first-quarter results on Tuesday.

It’s a big week for earnings reports generally, with roughly 30% of the companies in the S&P 500 scheduled to say how much they made during the year’s first three months. That includes companies that have come to be known as part of the “Magnificent Seven,” beyond Tesla and Alphabet. This handful of companies was responsible for the majority of the S&P 500’s big gain last year, raising the bar of expectations for them to justify their stock prices.

Analysts believe those seven stocks saw growth in their earnings per share slow to 39% as a group from 63% at the end of last year, according to strategists at Bank of America. This past quarter may also have marked the trough for earnings declines among the other 493 companies in the index.

The difference in growth between the Magnificent Seven and the rest of the S&P 500 should close by the end of the year, strategists Ohsung Kwon and Savita Subramanian said in a Bofa Global Research Report.

Verizon Communications helped kick off this week’s reports by disclosing a drop in profit that wasn’t as bad as analysts expected. It cited price increases and other measures to support its revenue. Verizon’s stock swung from an early gain to a loss of 4.7% after it reported weaker revenue for the first quarter than expected and kept its forecast for full-year profit the same.

All told, the S&P 500 rose 43.37 points to 5,010.60. The Dow gained 253.58 to 38,239.98, and the Nasdaq jumped 169.30 to 15,451.31.

Even more pressure than usual is on companies broadly to deliver fatter profits and revenue. That’s because the other big factor that sets stock prices, interest rates, looks unlikely to offer much help in the near term.