Dow rallies, S&P 500 on track to close at all-time high on busiest day for earnings

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Stocks were headed for modest gains Thursday after a round of upbeat earnings reports from tech heavyweights, but some turmoil was seen at noon as Treasury yields surged and investors questioned how many good ones. news was traded on the market. Investors were also weighing the dovish comments made Wednesday by Federal Reserve Chairman Jerome Powell, President Joe Biden‘s launch of an additional $ 1.8 trillion government spending package, and data showing the economy The US had grown 6.4% at an annual rate in the first quarter.

What are the main landmarks doing? The Dow Jones Industrial Average DJIA, + 0.74%, gained 209 points, or 0.6%, to 34,029. The S&P 500 SPX rose 25 points, or 0.6%, to trade at about 4,208, on track to surpass its previous closing record of 4187.62. The broad-based benchmark index hit an intraday high of 4,218.78 earlier in the session. The Nasdaq Composite COMP, + 0.25%, rose 29 points, or 0.2%, to 14,080, after hitting an all-time intraday high at 14,211.57. On Wednesday, stocks ended with small losses after the Fed meeting, after the S&P 500 hit an intraday record. The Dow Jones fell 164.55 points, or 0.5%, while the S&P 500 closed 0.1% lower and the Nasdaq Composite lost 0.3%. What drives the market? Corporate earnings remain strong, with Apple Inc. AAPL, + 0.53% and Facebook Inc. FB, + 7.18% delivering much stronger results than expected Wednesday night, offering a test for stocks that have failed to exit. of a lateral trading range. despite a solid season of results. Ratings Game: Why Apple’s ‘Explosive’ Earnings Aren’t Soaring Its Stock Thursday is the busiest day of the quarterly earnings reporting season, with about 11% of the S&P 500 Index due to updates released. Caterpillar, McDonald’s, Comcast and Merck reported before the market opened. Amazon and Twitter will publish the results after the market closes. Currently, about 86% of S&P 500 companies that have reported exceeded estimates, with earnings that exceed expectations by 22.7%, according to Refinitiv data. In terms of revenue, 77% of companies have exceeded expectations. Some analysts warned that a further rise in Treasury yields could spell trouble for stocks, particularly in the tech sector. Rising returns can be a hindrance, especially for growth-oriented companies, because they reduce the discounted value of future earnings. An increase in yields in March was attributed to the addition of fuel to a rotation of tech stocks and other high-flying companies towards more cyclical stocks poised to benefit from the reopening of the economy. Since then, yields have receded, after climbing to 14-month highs around 1.78%. “The steady but noticeable rise in Treasury yields this week could be weighing on US equities. And if the pace of Apple’s earnings can’t ignite Wall Street, it doesn’t bode well for the US. remainder of earnings season, “Raffi Boyadjian, senior investment analyst at XM, said in a note. Treasury yields fell Wednesday afternoon after the Federal Reserve and Powell took a dovish tone, but rose again on Thursday. The yield on the 10-year Treasury BX: TMUBMUSD10Y rose 3.4 basis points to 1.648%. Rising returns appeared to be weighing on equities on margins on Thursday, but they were unlikely to trigger a renewed and significant turnover from tech stocks and other growth stocks to cyclical stocks unless the 10-year period made a new turn. cycle high, said Art Hogan, chief market strategist. at National Securities, in a telephone interview. Read: What’s Next for the Fed? A “ phasing out ” signal from Powell in late August in Jackson Hole On Wednesday night Biden, in a speech to a joint session of Congress, called for more government investment in the economy, including a proposal of 1.8 trillions of dollars for additional spending on child care and education. and paid vacations offset in part by higher taxes for wealthy Americans. Capitol Report: The word ‘jobs’ appeared more than 40 times in Biden’s first speech to Congress In US economic data, claims for unemployment benefits for the first time fell to 553,000 last week from 566,000 reviewed one week earlier, the Labor Department said Thursday. With revisions, the reading was the lowest level of claims since the pandemic occurred last year. Gross domestic product, the official scorecard for the US economy, rose at an annual rate of 6.4% in the first quarter, the government said on Thursday. The data shows that “the seeds of a virtuous circle have clearly sprouted, but there is still plenty of room for growth in the coming quarters,” said Jim Baird, chief investment officer at Plante Moran Financial Advisors. “Consumers are full of cash and COVID fatigue has put them in the mood to spend. We hope they do, ”he said. Pending home sales in the United States rose 1.9% in March, less than expected, according to the National Association of Realtors, as prices rose and 30-year fixed-rate mortgages rose from pandemic lows. What companies are in focus? Shares of Apple rose slightly after the iPhone maker posted better-than-expected revenue across all of its product categories for the March quarter, boosted its buyback program by $ 90 billion and increased its dividend by 7%. Facebook shares rose 7.1% after the social media giant posted better-than-expected earnings. Ford Motor Co.F, -7.83% on Wednesday night said it had one of its best quarters on record as it turned into a profit and consumers welcomed new vehicles but also warned that a global shortage of chips could lead to a $ 2.5 billion hit to the market. final result of the automaker this year. The shares fell 7.8%. Ebay Inc. shares EBAY, -10.06% fell 10.1% after the online auction site reported better-than-expected first-quarter earnings, helped by growth in major categories, namely sneakers and watches. Qualcomm Inc.’s QCOM share, + 4.20%, rose 3.9% after the chipmaker delivered results and an outlook Wednesday night that beat Wall Street estimates following recent stock cuts. Caterpillar Inc. CAT, shares of -2.13% fell 2.6% after the construction equipment maker posted results that beat estimates. Shares of Merck & Co. Inc. MRK, -4.81% fell 5.1% after the pharmaceutical giant reported first quarter earnings and revenue that did not meet expectations as the COVID-19 pandemic and the loss of market exclusivity weighed on pharmaceutical sales. The Wall Street Journal reported that Verizon Communications Inc. VZ, + 1.59% is exploring a sale of assets, including Yahoo and AOL. Verizon shares rose 1.6%. McDonald’s Corp. MCD, + 1.40% reported first quarter net income of $ 1.54 billion, or $ 2.05 per share, compared to $ 1.01 billion, or $ 1.47 per share, for the year past. The shares were up 1.3%. Shares of cruise line operators traded mixed on Thursday, after the Centers for Disease Control and Prevention said cruise ships could resume travel in mid-July. Carnival Corp. CCL shares, -1.65%, rose 0.4%, while Royal Caribbean Group RCL shares, -2.50% fell 1.6% and Norwegian Cruise Line Holdings Ltd. NCLH, + 0 , 55% advanced 1.6%. Shares of Uber Technologies Inc. UBER, -6.22% and Lyft Inc. LYFT, -11.15% took a hit after US Labor Secretary Marty Walsh said concert workers should be classified as employees. What are other markets doing? The ICE US Dollar Index DXY, + 0.01%, a measure of the currency against a basket of six major rivals, was up 0.1%. Oil futures rose for the third consecutive session, with the US benchmark CL00, + 1.94% gaining $ 1.15, or 1.8%, to settle at $ 65.01 a barrel on the New Mercantile Exchange. York. Gold traded lower for the third consecutive session, with the June GC00 contract, -0.06% down $ 5.60, or 0.3%, to settle at $ 1,768.30 an ounce on Comex. The Stoxx Europe 600 SXXP Index, -0.26%, was down 0.3%, while the London FTSE 100 UKX, -0.03%, ended flat. The Shanghai Composite SHCOMP, + 0.52%, rose 0.5%, while the Hong Kong Hang Seng HSI Index, + 0.80%, advanced 0.8%.