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Stocks open higher ahead of tech earnings


U.S. stocks rose ahead of earnings from big tech companies and after Federal Reserve minutes eased some investors’ worries about aggressive measures to tame inflation.

The S&P 500 rose 0.8%, signaling that the broad index could extend its gains after closing 1% higher on Wednesday. The Dow Jones Industrial Average gained 1%. The Nasdaq Composite Index rose 0.3%.

Stocks have wobbled this week, swinging between daily gains and losses as investors considered the Federal Reserve’s next monetary tightening moves to fight inflation and how much they could weigh on growth and markets. Minutes released Wednesday by the Fed showed policymakers in agreement with half-percentage-point hikes in June and July, consistent with earlier communication.

“To some extent, markets have been reassured that the Fed is not going to tighten more aggressively than expected,” said Luc Filip, chief investment officer at SYZ Private Banking.

The yield on the benchmark 10-year Treasury note had been stable since Wednesday at 2.746%. Yields rise when prices fall.

A second reading of US gross domestic product in the first quarter was worse than the first with a contraction at an annual rate of 1.5%.

“Economic data has come in weaker than expected lately, we’re seeing this tightening in the economy. The severity of the slowdown in growth is what the markets are thinking now,” said Shaniel Ramjee, multi-fund manager. active at Pictet Asset Management.

Unemployment claims were 210,000, down from the previous week and lower than economists had expected, presenting a mixed economic picture.

The earnings season continues with VMware,

vmw 0.20%

Costco,

Ultimate Beauty,

Dell Technologies and Gap due to post-market earnings release.

“We focus on profits and profitability. Many stable companies are reporting lower forecasts,” Ramjee said. “Even the tech sector isn’t immune to pressure on margins, especially input costs like wages.”

In individual stocks, Nvidia fell 3% despite record revenue as its sales outlook for the current quarter fell below Wall Street estimates. Retailer Williams-Sonoma jumped 9% after posting a profit that beat analysts’ expectations. Macy’s jumped 13% after raising its full-year profit forecast.

VMware shares rose 0.3% after Broadcom confirmed it would acquire the cloud computing company for $61 billion in cash and stock. Broadcom fell 0.5%.

Traders worked on the floor of the New York Stock Exchange on Tuesday.


Photo:

Justin Lane/Shutterstock

Overseas, the pancontinental Stoxx Europe 600 index rose 0.3%. Shares of British telecommunications company BT Group fell 2.8% after it announced that the British government would investigate Dutch rival Altice’s increased stake in the company.

In Asia, major benchmarks were mixed. The Shanghai Composite Index gained 0.5% while Hong Kong’s Hang Seng fell 0.3%. Japan’s Nikkei 225 also fell 0.3%.

South Korea’s central bank raised its key rate to 1.75% on Thursday and said it would tighten policy further to continue to fight high inflation.

In commodities, the global oil benchmark, Brent, added 0.8% to trade at $111.97 a barrel.

Write to Anna Hirtenstein at [email protected]

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