Stocks Climb Ahead of Tech Earnings

Stocks Climb Ahead of Tech Earnings

U.S. stocks rose Thursday, putting the Dow Jones Industrial Average on course for a fifth consecutive day higher, as shares of companies from technology to financials to the consumer sectors advanced.

The blue chips added 1.6%, or about 660 points, while the S&P 500 gained 1.9%. The tech-heavy Nasdaq Composite climbed 2.6%, helped by gains in shares of

Apple,

Microsoft,

Amazon.com

and

Tesla.

Stocks have swung this week, fluctuating between gains and losses as investors consider how the Federal Reserve’s plans to tighten monetary policy to combat inflation could weigh on economic growth and the performance of financial markets.

Fed meeting minutes released Wednesday showed that policy makers were in agreement for half-percentage point increases in June and July, in line with previous communication. Major stock indexes closed higher after the release. 

“To some extent, markets have been reassured that the Fed isn’t going to tighten more aggressively than what is expected,” said

Luc Filip,

head of investments at SYZ Private Banking.

Equity investors have endured a particularly volatile period lately. At the end of last week the S&P 500 fell far enough that it was on track to close at least 20% below its January peak. The benchmark then reversed course to avoid closing in bear market territory.

Despite the advances by major indexes in recent days, many investors expect markets to remain unsettled for some time to come.

“I think we’re going to still go through some more volatility ahead,” said

Leslie Thompson,

chief investment officer at Spectrum Wealth Management.

Money managers are closely watching fresh data as they gauge the health of the economy. On Thursday a second reading of first-quarter U.S. gross domestic product came in worse than the first with a contraction at an annual rate of 1.5%.

“Economic data has come in weaker than expected lately. We do see this tightening in the economy. How severe the growth slowdown is what markets are thinking about now,” said

Shaniel Ramjee,

a multiasset 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 results for indications that inflation has begun to weigh on profits.

“We are focusing on earnings and profitability. A lot of stable companies are reporting lower guidance,” Mr. Ramjee said. “Even the tech sector is not immune to margin pressure, especially from input costs like wages.” 

Nvidia

shares rose 3.5% after the chip maker posted record revenues, though its sales outlook for the current quarter came in below Wall Street’s estimates.

Shares of retailer

Williams-Sonoma

jumped 12% after the retailer posted profits that beat analysts’ expectations.

Macy’s

shares surged 16% after raising full-year earnings guidance.

Dollar Tree

shares advanced 18% and

Dollar General

shares rose 12% after the discount retail chains reported earnings higher than Wall Street’s modest expectations.

Shares of

VMware

VMW 3.63%

added 2.2% after

Broadcom

confirmed that it will acquire the cloud computing firm for $61 billion in cash and stock. Broadcom shares rose 2.8%.

In the bond market, the yield on the benchmark 10-year U.S. Treasury note rose to 2.776%, from 2.746% Wednesday. 

Global oil benchmark Brent crude added 2.7% to trade at $117.16 a barrel.

Overseas, the pan-continental Stoxx Europe 600 ticked up 0.8%. In Asia, major benchmarks were mixed. The Shanghai Composite Index added 0.5% while Hong Kong’s Hang Seng fell 0.3%. Japan’s Nikkei 225 also declined 0.3%. 

South Korea’s central bank raised a key policy rate to 1.75% on Thursday and signaled it would tighten policy further to keep fighting against high inflation. 

Write to Anna Hirtenstein at anna.hirtenstein@wsj.com and Karen Langley at karen.langley@wsj.com

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