August 19, 2022

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Shares end higher on services and earnings data

Shares end higher on services and earnings data

US stocks rose on Wednesday, for the first winning session of the major indicators in August, based on the strength of new earnings reports and after a key reading of the services sector hit its highest level in three months.

As of 4 p.m. ET, The S&P 500 Index rose 1.6%, recouping some losses after falling on Monday and Tuesday. The Dow Jones Industrial Average added 1.3%. The technology-heavy Nasdaq Composite is up 2.6%.

Stocks have come under renewed pressure in recent days of geopolitical tensions like US House Speaker Nancy Pelosi met the president of Taiwan Despite warnings from China. Meanwhile, Federal Reserve officials said the central bank is likely to do so Keep raising interest rates In upcoming meetings, he dampens hopes in the markets that slowing economic growth could mean a change of policy.

So far, Pelosi’s trip has not had any tangible repercussions, and some are better than expected Earnings Reports Investors say, amid low liquidity in August, sentiment lifted.

The key economic report also helped boost sentiment. The US service sector continued to expand in July, according to a report from the Institute for Supply Management. The ISM’s index of business terms such as restaurants, hotels and retailers hit a three-month high in July.

After opening August with two straight sessions of losses, stocks are “generally gaining in optimistic risk sentiment,” said Matt Wheeler, a financial analyst at StoneX. He said that recent earnings and the ISM report eased fears of an impending recession.

Earnings have been very good in terms of exceeding expectations, but the market is also experiencing bigger problems, said Olivier Marciot, global macro portfolio manager at Unigestion. “There’s still a lot of inflation going on, central banks are maintaining that hawkish rhetoric and we’re getting some geopolitical factors on top of that,” he said.

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The yield on the benchmark 10-year Treasury rose to 2.747% from 2.740% on Tuesday. weak economic data It has affected returns in recent days, according to Michael Hewson, markets analyst at CMC Markets. He said there were “growing concerns that the US economy could slow sharply”.

whether that or The economy is technically in recession, Aaron Dunn, portfolio manager for Eaton Vance, said inflation and the pressure it is putting on the Federal Reserve to raise interest rates is creating an environment for investors that is fundamentally different from anything they’ve seen over the past several decades. He said it wouldn’t end soon.

There has been a recent rebound in some of the hardest-hit stocks, he said, but those hoping for trade growth to return may be disappointed. “The stock returns will be crushing,” he added.

At 4 p.m. trading,

PayPal

Shares jumped 9.3 percent after hedge fund Elliott Management confirmed it had a $2 billion stake in the payments company. Starbucks It rose 4.3% after saying Demand is still strong Partially raising prices led to higher labor costs.

vaccine maker

Moderna

It then increased by 16%. Earnings are higher than analyst estimates It said it would start a new $3 billion share buyback program.

Airbnb

down 1.1% after the company said it was back in profit but Investors’ expectations disappointed. Online dating group

match

It fell 18% after publishing results that came in below estimates, and said the CEO of its Tinder platform is leave the company.

chip maker

Advanced Micro Devices

It decreased 0.7% after it reported a decrease in profit It issued guidance for the current period less than Wall Street expectations.

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CloroxAnd the

MGM ResortsAnd the

and insurance companies

Metlife

And the

Allstate

It is scheduled to announce earnings after the market closes.

Investors say better-than-expected earnings reports amid lower liquidity in August are lifting sentiment.


picture:

Andrew Kelly/Reuters

Oil prices fell after OPEC + . meeting Where the commission proposed to increase production less than expected, according to delegates. US crude fell 4% to $90.66 a barrel.

Offshore, the Stoxx Europe 600 continental index was up 0.5%. UK listed cyber security company

Avast

It rose 44% after a UK regulator said it had provisionally approved

Norton Live Look‘s

$7.3 billion acquisition of the company. French

Société Generale . Bank

It rose 3.1% after reporting a narrower loss than analysts had expected, despite its exit from Russia.

In Asia, the main criteria were mixed. The Shanghai Composite fell 0.7%, extending losses after closing 2.3% lower on Tuesday. Hong Kong’s Hang Seng is up 0.4% and Japan’s Nikkei 225 is up 0.5%.

Write to Anna Hirtenstein at [email protected] and to Paul Vigna at [email protected]

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