Stocks gained ground in morning trading on Wall Street Wednesday as investors review a mostly solid round of earnings reports and await the Federal Reserve’s latest policy statement
Stocks gained ground in morning trading on Wall Street Wednesday as investors review a mostly solid round of earnings reports and await the Federal Reserve’s latest policy statement.
The decisive move higher was a welcome relief following several days of volatile swings as investors try to gauge whether the Fed will succeed in its new effort to fight inflation. The central bank is widely expected to continue drawing back its stimulus measures ahead of rising interest rates in the coming months. The Fed’s latest statement will be released later Wednesday.
The S&P 500 rose 1.6% as of 10:19 a.m. Eastern. The Dow Jones Industrial Average rose 372 points, or 1.1%, to 34,678 and the Nasdaq rose 2.2%.
The gains pushed every major index into the green for the week.
Technology stocks led the market higher. Microsoft rose 4.1% after reporting standout results for its latest quarter on solid demand for its cloud-computing services and work software. Chipmaker Texas Instruments rose 4.6% after giving investors a solid earnings report and financial forecast.
Retailers, communications companies, banks and industrial firms also rose. Strong earnings reports and financial forecasts underpinned some of the gains. Speciality glassware Corning rose 13.5% after reporting strong financial results.
Bond yields were steady. The yield on the 10-year Treasury remained at 1.78% from late Tuesday.
Several companies issued fresh warnings about supply chain problems crimping operations. Computer networking company F5 fell 12.5% after giving investors a disappointing revenue forecast as it faces supply chain constraints.
Consumer products maker Kimberly-Clark fell 4.6% after giving investors a weak profit forecast and saying that it expects the supply chain disruption to persist into 2022.
Pressure from inflation on businesses and consumers is what is driving the Fed to raise interest rates this year. There is some concern on Wall Street that Fed Chair Jerome Powell could suggest that the central bank will raise interest rates this year more than the four times that most economists currently expect.
For nearly two years, investors had poured money into stocks, confident that the Federal Reserve would help keep share prices upright. With that support going away, markets have been hit with a bout of volatility. The S&P 500 is down 7.6% so far this year.
Investors are also gauging the threat from COVID-19 and the omicron wave’s impact on economic growth. The International Monetary Fund cited the omicron variant as the reason it downgraded its forecast for global economic growth this year.
Wall Street is also carefully watching the potential conflict between Russia and Ukraine, which could push energy prices higher and force nations to focus on war just as they are trying to focus on keeping the virus pandemic in check, along with economic growth.
Source: abcNEWS
