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Tech Stocks Rise Before Apple, Amazon Earnings


US stocks jumped on Thursday, with technology stocks leading the charge, as investors cheered for a solid earnings report.

Meta

The platforms show resilience in the face of rising inflation.

The

Facebook

Facebook 18.61%

Owner’s shares jumped 18% after the company said it had added more users than investors expected in the first quarter. That gain helped send the Nasdaq Composite Index up 2.9% and boosted the technology sector of the S&P 500, the index’s best performer in midday trading. The next big earnings test comes after the closing bell, when

Apple

and

Amazon.

AMZN 5.00%

com reports their quarterly results.

The S&P 500 index gained more than 2.4% in afternoon trade, while the Dow Jones Industrial Average gained 619 points, or 1.9%. In the bond market, 10-year Treasury yields rose to 2.875% from 2.817%. Yields and bond prices move in opposite directions. Escalating oil prices sent shares of energy companies higher as German government officials said the country was now ready to stop buying Russian oil. Benchmark Brent crude rose 2% to $107.04 a barrel.

Traders say the stock market is poised for a rebound following recent sell-offs in tech stocks, including an earlier big boom in April.

Netflix

Disappointing income the investors. With little visibility into how higher interest rates will filter through the broader economy, money managers say trade has been thin and is prone to swing moves in either direction. .

“Nothing goes down in a straight line and nothing goes up in a straight line,” said Michael Antonelli, managing director and market strategist at Baird. “You don’t need much to move the stock market when everyone is so pessimistic.”

While Thursday’s gains for Meta stocks and technology were generally substantial, they paled in comparison to last year’s losses. Shares of Meta are still down more than 40% so far this year, and the tech sector in the S&P 500 is down nearly 17% from its 2021 close. Just this month, inflation fears, growth worries Profits and instability abroad have sent stock acrobatics. The S&P 500 index is down 7.7% through the end of Wednesday, on track for its worst April since 1970, according to Dow Jones Market Data Group.

John Roe, head of multi-level funds at Legal & General Investment Management, said: “The volatility in bonds is the highest since the financial crisis.

“I don’t think people have a lot of faith,” he said. “It was a time when fundamental uncertainty was particularly high.”

The U.S. corporate world is in for a terrible earnings season, and while gains and losses are moving individual stocks, analysts and traders say they are more concerned about the maturity of executives. for earnings calls.

“What I want to hear in the earnings report is not whether you’ve met or exceeded expectations, but what you see going forward,” said Kristina Hooper, global head of market strategy at Invesco. So far this earnings season, she said, the executives’ commentary has painted a picture that the challenges facing corporations may be lingering.

In every stock that moves on Thursday,

Twitter

Stocks rose 1.9% after the social media company posted higher revenue and withdraw financial guidance prior to redemption by

Elon Musk.

Southwest Airlines

up 0.7% due to the airline forecast to be profitable for the rest of the year.

Caterpillar

Shares fell 2.8% after the industrial company said profit margins fell in the first quarter.

McDonald’s‘S

said earnings were better than analysts’ expectations, pushing the stock up 3.4%.

On the economic front, the data showed the US economy contracted at a 1.4% annual rate in the first quarter, the first contraction since the pandemic. While the pace of the decline is worrisome, some analysts say they don’t predict a recession based on fundamental data. A big driver for the decline is the widening trade deficit, meaning the US imports more than it exports. Consumer spending also increased during the period, up slightly from the end of last year.

The data could also play a role in the Federal Reserve’s decision on whether to raise interest rates and raise rates at its next meeting, scheduled for next week.

Investors will get a glimpse of how decades of high inflation — and the Fed’s response — are affecting consumer sentiment when Apple and Amazon release quarterly results an hour later. end bell.

Foreign markets increased sharply. Stoxx Europe 600 rose 0.6% on strong earnings report.

Traders worked on the floor of the New York Stock Exchange on Wednesday.


Photo:

justin lane / Shutterstock

The Chinese market regained its footing after worry about concerns that closures in major cities will slow growth in the world’s second-largest economy. The Shanghai Composite Index rose 0.6 percent. Hong Kong’s Hang Seng rose 1.7%.

The Nikkei 225 Index rose 1.7% after

Bank of Japan

strengthen it low interest rate commitment despite rising inflation. The central bank said it would buy 10-year Japanese government bonds with a yield of 0.25% per business day to ensure that yields don’t exceed that level.

Committed to easy monetary policy contrasts with the Fed’s stance, and keeps the yen lower against the dollar. Japan’s currency fell to around 130.65 yen/USD, its weakest level since 2002. The offshore yuan weakened about 0.9%, with a dollar buying about 6.64 yuan bad.

The WSJ Dollar Index rose 0.8% to 95.94, near its highest level since March 2020, as the early spread of Covid-19 was causing stress in global markets.

In commodities, the European natural gas market calms down after the price increase as Russia turn off the power supply for two European Union members on Wednesday. Gasoline futures fell 7.7% to 99.15 euros, or $103.96, a megawatt-hour.

Write to Joe Wallace at [email protected] and Quentin Webb at [email protected]

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