NEW YORK (AP) — U.S. stocks rose for the second day in a row Tuesday, cushioning the blow from a tough April.
The S&P 500 rose 1.2%, further emerging from the hole left by six days of losses. On a losing streak. The Dow Jones Industrial Average rose 263 points, or 0.7%, and the Nasdaq Composite Index rose 1.6%.
A weaker-than-expected report on U.S. business activity helped the market, which remains in a troubling phase. Wall Street’s hope is that the economy will avoid a deep recession, but not a slump that would continue to put upward pressure on inflation.
A preliminary report released by S&P Global on Tuesday seems to do just that. In the bond market, yields on U.S. Treasuries fell, and stock markets expanded their gains immediately after the announcement.
Stock prices are rising on the back of Wall Street. Associated Press business correspondent Seth Stell has more.
A large number of earnings reports also influenced much of the trading, highlighting the fact that many companies beat analysts’ expectations.
GE Aerospace rose 8.3% after the company reported better-than-expected first-quarter profits and raised its full-year profit forecast.
Kimberly-Clark rose 5.5% after the maker of Huggies, Kleenex and Cortex also raised its full-year profit forecast.General Motors rose 4.4% after the quote. Sales of high-profit vehicles such as pickup trucks. Danaher rose 7.2%, pointing to strength in its bioprocessing and molecular diagnostics businesses.
These helped to mask Nucor’s 8.9% decline after the steelmaker missed expectations in both profit and revenue.
MSCI, whose investment index guides much of the industry, fell 13.4% after reporting weaker-than-expected sales growth. Invesco’s profits and sales fell 6.4%, falling short of expectations.
JetBlue Airways fell 18.8% despite beating expectations in its latest quarter. The company’s future sales outlook was lower than some analysts expected, and it said competition in Latin America could weigh on its performance.
Overall, the S&P 500 rose 59.95 points to 5,070.55. The Dow Jones Industrial Average rose 263.71 points to $38,503.69, and the Nasdaq Composite Index rose $245.33 to $15,696.64.
The market’s main event may have arrived after the day’s close. tesla announced its financial results for the first three months of this year, making it the first of the Magnificent Seven stocks that accounted for most of the S&P 500’s gains last year.
Expectations are high for each of the Mag 7s, which are set to rise significantly in 2023, and will need to at least match them to justify their prices.
Several stocks have led the broader market’s recent decline, with the S&P 500 index down 5.5% in April. “This highlights the importance of the next two weeks of gains, dominated by Mag 7, and the risk that disappointing earnings could accelerate the sell-off,” said Barclays strategists led by Stefano Pascal and Anshul Gupta. said.
Skeptics still argue that the overall stock market is too expensive, but criticism will only ease if companies generate higher profits or interest rates fall. The latter seems unlikely.
Federal Reserve officials I was warned last week It may be necessary to keep interest rates high for some time to ensure inflation falls to the 2% target. This was a huge disappointment for financial markets, ruining hopes that had been building since the Fed earlier indicated there could be three rate cuts this year.
After inflation cooled sharply last year, interest rate cuts appeared to be on the horizon. but, string of report will be shown this year inflation Conditions continue to be hotter than expected, raising concerns that progress is stalling.
That’s why Tuesday’s report, which suggests a slowdown in overall business activity growth across the country, was welcomed. That could leave the door open for the Fed to cut rates by a factor of 1 to 2, which many traders currently expect.
The 10-year Treasury yield fell to 4.59%, easing pressure on stocks in general and high-growth and high-dividend stocks in particular. The yield on the 10-year bond was 4.64% just before the report was released and 4.61% late Monday.
Two-year Treasury yields, driven largely by expectations of Fed action, fell as well. The rate fell to 4.92% from 4.97% late Monday.
In overseas stock markets, indexes rose in most regions of Europe. They were mixed early in Asia. Stocks rose 1.9% in Hong Kong, but fell 0.7% in Shanghai.
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AP Business Writers Matt Ott and Zimo Zhong contributed.
