US stocks rise on upbeat earnings | Financial Markets News

Tesla led gains in the tech-heavy Nasdaq 100 after posting record profits that blew past estimates.

U.S. stocks rose as upbeat earnings allayed fears of a recession in the world’s largest economy. A selloff in Treasuries resumed, further fueling the debate around whether inflation is peaking.

The S&P 500 gained with all but two of the 11 main industry groups advancing. The tech-heavy Nasdaq 100 outperformed major benchmarks, with Tesla Inc. leading gains after posting record profits that blew past estimates. Airlines rallied as American Airlines Group Inc. said corporate and international flying was coming back and projected a second-quarter profit.

The 10-year Treasury yield added 8 basis points. Bond bears returned after Wednesday’s rally in Treasuries stoked by some investors including Bank of America Corp. and Nomura Asset Management who said the panic over inflation and rate-hike bets had gone too far.

Meanwhile, equities stayed resilient to higher yields with their focus on earnings. Tesla rallied 8% after reporting better-than-expected first-quarter results and with Elon Musk predicting output will grow at a fast clip for the rest of the year.

American Air jumped 6.6% as its upbeat outlook built on a first-quarter adjusted loss that was less than analysts estimated. United Airlines Holdings Inc. climbed 12% after forecasting a profit this year.

While inflation and central-bank reactions to the spike in rising prices are big drivers of markets right now, earnings have been important this week too, especially after Netflix Inc.’s selloff, Chris Gaffney, president of world markets at TIAA Bank, noted.

“On the flip-side, we get Tesla this morning and it’s rallying back up on their profits,” Gaffney said by phone. “American Airlines released — so travel and leisure, even with higher gas prices, they’ve been able to raise their ticket prices. So far, it looks like consumers are shrugging off the price increases, but everybody is complaining about it. We’ll see how long that lasts.”

While it’s early in the U.S. earnings-reporting season, the signs are encouraging so far. Of the 87 S&P 500 companies that have posted results, about 80% have beaten estimates, according to Bloomberg data.

U.S. jobless claims eased last week to a level that’s consistent with an exceptionally tight labor market, Labor Department data showed Thursday. Initial unemployment claims decreased by 2,000 to 184,000 in the week ended April 16, while continuing claims for state benefits dropped to 1.42 million in the week ended April 9, the lowest since 1970.

As the debate intensifies over whether inflation has peaked, it’s unlikely to derail global central banks from their tightening path as commodity shortages from the war in Ukraine keep prices elevated.

Central bankers’ thinking on rates and inflation wingill be in focus Thursday with Fed Chair Jerome Powell and ECB President Christine Lagarde discuss the global economy at an International Monetary Fund. The Bank of England’s Governor Andrew Bailey is scheduled to speak at a different event.

Will value stocks finally outperform growth peers? What will be the best-performing EM stock market for the rest of 2022? “Rotations” is the theme of this week’s MLIV Pulse survey. Participation takes one minute and is anonymous, so please click here to get involved.

What to watch this week:

• Fed Chair Jerome Powell, ECB President Christine Lagarde discuss global economy at IMF event, Thursday
• Manufacturing PMIs: Euro zone, France, Germany, U.K, Friday
• Bank of England’s Andrew Bailey to speak, Friday

Some of the main moves in markets:

Stocks

• The S&P 500 rose 0.8% as of 10:44 a.m. New York time
• The Nasdaq 100 rose 1%
• The Dow Jones Industrial Average rose 0.7%
• The Stoxx Europe 600 rose 0.5%
• The MSCI World index rose 0.4%

Currencies

• The Bloomberg Dollar Spot Index rose 0.2%
• The euro rose 0.1% to $1.0868
• The British pound fell 0.1% to $1.3054
• The Japanese yen fell 0.4% to 128.40 per dollar

Bonds

• The yield on 10-year Treasuries advanced nine basis points to 2.92%
• Germany’s 10-year yield advanced seven basis points to 0.93%
• Britain’s 10-year yield advanced eight basis points to 1.99%

Commodities

• West Texas Intermediate crude rose 2.3% to $104.58 a barrel
• Gold futures fell 0.5% to $1,946.20 an ounce

–With assistance from Andreea Papuc and Srinivasan Sivabalan.

© 2022 Bloomberg L.P.