Wall Street ticks higher, adding to gains after big rally

NEW YORK (AP) — Wall Street is tacking a bit more onto its big gains from a day earlier, as more profit reports roll in from big U.S. companies on Wednesday.

The S&P 500 was 0.8% higher in morning trading, a day after soaring 2.8% for its best day in weeks. The Dow Jones Industrial Average was up 76 points, or 0.2%, at 31,903, as of 10:52 a.m. Eastern time, and the Nasdaq composite was 1.7% higher.

Profit reporting season is ramping, with more types of industries offering details about how high inflation and a possible recession are affecting their customers. A lot is riding on whether they can continue to deliver healthy profits.

Stocks tumbled roughly 20% from their highs this year because of worries about rising interest rates, and proof that profits can remain strong would provide a big support for markets. On the other hand, warnings about upcoming weakness could kick off another leg downward.

Companies so far have been mostly topping profit expectations this reporting season, as is usually the case, though the most recent reports were mixed.

Nasdaq, the company behind its namesake trading exchange, jumped 5.9% after delivering stronger profit and revenue than Wall Street expected. Comerica, the Dallas-based financial services company, added 2.5% after it also reported stronger-than-expected results.

Netflix rose 4% after it said it lost fewer subscribers during the spring than expected. It, though, remains the worst stock in the S&P 500 for the year, down by nearly two thirds.

Beyond Netflix, several other tech-oriented companies were making strong gains. Amazon climbed 4%, and Nvidia jumped 4.7%, helping the Nasdaq composite index to be the market’s clear leader.

On the losing end was Baker Hughes, which tumbled 10.7% after it reported weaker results for the spring than analysts expected. Northern Trust fell 4.5% after its profit fell short of forecasts.

Bath & Body Works lost 2.1% after it cut its forecast for profit made during the spring, saying it’s likely to report lower revenue than a year earlier. It cited a challenging environment, with inflation pressuring its customers and its business.

In Europe, stocks were slipping amid worries about whether Russia would restrict supplies of natural gas headed for the region after some maintenance on a key pipeline is scheduled to end Thursday. Germany’s DAX fell 0.1%, and French stocks dipped 0.1%.

The continent is also preparing for the first increase in interest rates by the European Central Bank in 11 years on Thursday, as it tries to beat back inflation.

The U.S. Federal Reserve has already hiked rates three times this year, by increasing margins each time. When it meets next week, investors say the only question is if it raises its key rate by another 0.75 percentage points or opts for a mega-hike of a full percentage point.

Such increases to rates make borrowing more expensive, which slows the economy. The hope is that the Federal Reserve and other central banks can deftly find the middle ground where the economy slows enough to whip inflation but not enough to cause a recession.

Some parts of the economy are already slowing because of the rate hikes, particularly the housing industry. A report on Wednesday morning showed that sales of previously occupied homes weakened last month by more than economists expected.

In the bond market, the yield on the two-year Treasury, which tends to follow expectations for the Fed’s actions, fell to 3.22% from 3.24% late Tuesday. The 10-year yield slipped to 3.00% from 3.01%.

Previous articleLocal PR association members win at state awards ceremony
Next articleUS home sales fell in June as prices reach new heights