Stocks end higher on Wall Street as earnings roll in
NEWYORK Wall Street posted more gains Tuesday as major stock indexes rallied and Treasury yields fell.
The S&P 500 rose 1.6%, with roughly 90% of stocks in the index notching gains. Since mid-September, the benchmark index had not been able to post more than two consecutive gains.
The Dow Jones Industrial Average rose 1.1%, while the Nasdaq closed 2.3% lower. The Russell 2000 index was 2.7% higher because smaller company stocks outperformed the wider market.
The latest gains were made as bond yields fell substantially, reflecting investor speculation that the Federal Reserve might ease up on its aggressive pace for interest rate increases.
The yield on the 10-year Treasury, which impacts mortgage rates, slipped to 4. 09% from 4. 23% late Monday. The yield on the Treasury’s two-year Treasury, which tracks Federal Reserve actions, fell to 4. 45% from 4. 50% late Monday. It seems like the market thinks longer-term yields may have peaked, which is providing some optimism for the (stock) markets,” said Randy Frederick of Charles Schwab, managing director of trading and derivatives.
The S&P 500 rose 61. 77 points to 3,859.11. The Dow added 337.. 12 points to close at 31,836.74. 246. was added to the Nasdaq. 50 points at 11,199.12. The Russell 2000 picked up 47. 76 points, closing at 1,796.16.
Technology stocks, retailers and communication companies were among the biggest drivers of Tuesday’s rally. Traders were looking for strong earnings reports from the big U.S. companies. companies.
General Motors rose 3.6% after delivering solid results. United Parcel Service rose initially, but then dropped 0.3% after the parcel delivery service beat Wall Street’s third-quarter earnings forecasts and revenue forecasts. Paint maker Sherwin-Williams saw a 3.6% jump after reporting solid financial results.
Packaging maker Crown Holdings fell 16.8% after its latest earnings fell short of estimates. General Electric, an industrial conglomerate, fell 0.5% after it reported weak third-quarter earnings.
Many other major names will be reporting earnings throughout the week. On Wednesday, Boeing, Ford, and Facebook’s parent company will release results. On Thursday, big companies will report results including Amazon, Caterpillar and Apple.
Outside of earnings, barbecue grill maker Weber soared 30.4% after it said BDT Capital Partners is interested in buying the rest of the company. Adidas dropped 2.4% after the German sportswear manufacturer ended its partnership deal with Kanye West due to his offensive and antisemitic comments.
Investors looking for indicators of inflation’s impact in different industries will find the latest earnings reports very useful. The prices of everything, from clothing to food, remain at their highest level in over 40 years. This puts pressure on companies to increase prices and cut costs while squeezeing consumers. The Federal Reserve and other central banks around the globe have raised interest rates to control inflation. Investors are concerned that the central bank is going too far in trying slow down the economy and instead creating a recession. The Fed is expected to raise interest rate by three-quarters of an additional percentage point at its November meeting. However, traders are more confident that the Fed would reduce its interest rate increase to 0. 50 percentage points in December, according to CME Group.
Markets are looking for signs that the central bank may ease up on rate rises. This includes data showing that the economy is slowing.
Tuesday’s release of a measure of home prices showed that the housing market is cooling. The S&P CoreLogic Case-Shiller Index which tracks prices in major cities, fell in August more than expected. The Fed’s aggressive interest rates increases have made borrowing more expensive, which has led to higher mortgage rates and a broader housing market crash.
The U.S. economy has already slowed down and actually contracted in the first half of the year. On Thursday, the government will release its third quarter gross domestic product report.
Elain Kurtenbach, Matt Ott and Joe McDonald contributed to this report.
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