Home Economy News Wall Street closes higher as investors digest earnings, megacap outlook

Wall Street closes higher as investors digest earnings, megacap outlook


By Chibuike Oguh

(Reuters) -U.S. stocks closed higher on Tuesday following positive earnings from top-tier companies and as investors were focused on quarterly results from Magnificent Seven and other megacap growth stocks.

Tesla (NASDAQ:TSLA) kicked off the earnings cycle for technology heavyweights after markets close on Tuesday. That will be followed by results from other tech majors, including Microsoft (NASDAQ:MSFT), Alphabet (NASDAQ:GOOGL), and Meta Platforms (NASDAQ:META), later this week.

Markets were also buoyed by upbeat earnings from companies such as General Motors (NYSE:GM), which closed up after the automaker’s better-than-expected quarterly results.

Ten out of 11 S&P 500 sectors were advancing led by gains in equities in communication services and technology sectors. The S&P Materials sector ended lower dragged by steelmaker Nucor Corp (NYSE:NUE), which lost ground after a first-quarter earnings miss.

“We’re having a continuation of an oversold balance that started yesterday and the catalyst today is that markets are now refocused on earnings reports across a wide array of sectors that were strong,” said Keith Lerner, co-chief investment officer at Truist Advisory Services in Atlanta.

According to preliminary data, the S&P 500 gained 58.81 points, or 1.17%, to end at 5,069.41 points, while the Nasdaq Composite gained 245.34 points, or 1.59%, to 15,696.64. The Dow Jones Industrial Average rose 267.19 points, or 0.70%, to 38,494.32.

Data on Tuesday showed that U.S. business activity cooled in April to a four-month low due to weaker demand, while rates of inflation eased slightly even as input prices rose sharply, suggesting possible relief ahead for rising consumer prices.

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Investors will be eyeing the release of the March Personal Consumption Expenditures (PCE) index – the Federal Reserve’s preferred inflation gauge – which is due on Friday.

Money markets are now pricing in just about 43 basis points of interest-rate cuts, down from about 150 bps seen at the start of the year, according to LSEG data.

“The PMI report was a little bit weaker and the employment was a little bit weaker and the market at this point is taking that is a bad-news-there-is-good-news, meaning the people are becoming too hawkish on Fed expectations,” Lerner added.

Spotify (NYSE:SPOT) surged after the Swedish music streaming giant posted gross profit topped 1 billion euros ($1.1 billion) for the first time.

Bullish full-year profit forecast helped to lift GE Aerospace shares. Danaher (NYSE:DHR) gained after the life sciences firm beat quarterly profit and sales expectations.

Shares of JetBlue plunged as the low-cost carrier trimmed its annual revenue forecast following lukewarm first-quarter revenue.

(Reporting Chibuike Oguh in New York; additional reporting by Shristi Achar A and Shashwat Chauhan in Bengaluru; Editing by Aurora Ellis)

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