U.S. stocks rose on Thursday, lifting the Dow Jones Industrial Average for the fifth straight day as shares in technology, financial and consumer companies rose.
Blue chips are up 1.6%, or about 660 points, while the S&P 500 is up 1.9%. The tech-heavy Nasdaq Composite rose 2.6%, helped by gains in Apple,
Microsoft,
Amazon.com and Tesla.
Stocks have moved back and forth this week, swinging between gains and losses, as investors ponder how the Federal Reserve’s plans to tighten monetary policy to fight inflation are hurting economic growth and financial market performance could.
Fed minutes released on Wednesday showed that policymakers agreed to hike rates by half a percentage point in June and July, in line with previous announcements. Major stock indices closed higher after the release.
“To some extent, markets have been reassured that the Fed will not tighten more aggressively than expected,” said Luc Filip, head of investment at SYZ Private Banking.
Stock investors have been through a particularly volatile period of late. Late last week, the S&P 500 fell enough to close at least 20% below its January high. The benchmark then reversed course to avoid a close in bear market territory.
Despite the major indices’ gains over the past few days, many investors expect markets to remain unsettled for some time to come.
“I think we’re going to see some more volatility going through it,” said Leslie Thompson, chief investment officer at Spectrum Wealth Management.
Money managers keep a close eye on new data when assessing the health of the economy. On Thursday, a second reading of US first-quarter gross domestic product worsened the first, contracting at a 1.5% annual rate.
“Economic data has been weaker than expected lately. We see this tightening in the economy. How severe the growth slowdown is is what the markets are pondering now,” said Shaniel Ramjee, multi-asset fund manager at Pictet Asset Management.
Initial jobless claims fell last week and hovered near historic lows, suggesting a mixed economic picture.
Traders worked on the floor of the New York Stock Exchange on Tuesday.
Photo:
Justin Lane/Shutterstock
Earnings reports continued to drive moves in individual stocks. Analysts have been scrutinizing the results for signs that inflation has started to weigh on earnings.
“We focus on earnings and profitability. Many stable companies are reporting lower forecasts,” said Mr. Ramjee. “Even the technology sector is not immune to margin pressures, especially from input costs such as wages.”
Nvidia shares rose 3.5% after the chipmaker reported record earnings, though its revenue forecast for the current quarter fell short of Wall Street estimates.
Shares in retailer Williams-Sonoma rose 12% after the retailer posted earnings that beat analysts’ expectations. Macy’s shares rose 16% after raising full-year earnings guidance.
Dollar Tree shares rose 18% and Dollar General shares 12% after discount retail chains reported earnings that beat Wall Street’s modest expectations.
VMware VMW shares 3.61%
up 2.2% after Broadcom confirmed it would acquire the cloud computing company for $61 billion in cash and stock. Broadcom shares rose 2.8%.
In the bond market, the benchmark 10-year Treasury yield rose to 2.776% from 2.746% on Wednesday.
Global oil benchmark Brent rose 2.7% to trade at $117.16 a barrel.
Overseas, the pan-continental Stoxx Europe 600 rose 0.8%. In Asia, the key benchmarks were mixed. The Shanghai Composite Index rose 0.5%, while Hong Kong’s Hang Seng fell 0.3%. Japan’s Nikkei 225 was also down 0.3%.
South Korea’s central bank hiked interest rates to 1.75% on Thursday, signaling that it will tighten monetary policy further to fight high inflation.
Write to Anna Hirtenstein at [email protected] and Karen Langley at [email protected]
Copyright ©2022 Dow Jones & Company, Inc. All rights reserved. 87990cbe856818d5eddac44c7b1cdeb8
Comments are closed.