(Reuters) -Wall Street’s main indexes rose on Thursday as strong earnings from Meta Platforms lifted battered technology and growth stocks and offset concerns around a contraction in U.S. economic growth in the first quarter.
The Facebook parent rose 14.3% after it reported a stronger-than-expected profit and the social-networking site eked out user growth.
Seven of the 11 major S&P 500 sectors advanced by mid-day on the penultimate trading session of the month, with technology and communication services leading gains.
Apple Inc, the world’s most valuable company, and e-commerce giant Amazon.com Inc both rose more than 2% ahead of their earnings later in the day.
“Right now the focus is on corporate earnings, but overriding the corporate earnings are a lot of concerns that have been around for a while, in terms of the Fed engaging in aggressive rate hiking and quantitative tightening cycle, inverted yield curves, geopolitical tensions and the worry about recession,” said Sam Stovall, chief investment strategist at CFRA.
“In some ways, the market has been fairly resilient because all we have experienced right now is a relatively mild correction in the S&P 500, and not falling into a bear market.”
A U.S. Commerce Department report showed gross domestic product fell at a 1.4% annualized rate last quarter, after clocking 6.9% growth in the fourth quarter. Economists polled by Reuters had forecast the economy growing at a 1.1% rate.
The slump in output reflected a wider trade deficit and moderate pace of inventory accumulation. While the headline figure could lead to howls about stagflation and recession from some quarters, it is not a true reflection of the economy.
The Ukraine war, China’s COVID lockdowns and surging inflation have weighed on the outlook for the global economy, sparking volatility ahead of the Federal Reserve’s May meeting next week, where a 50 basis points rate hike is expected.
At 12:05 p.m. ET, the Dow Jones Industrial Average was up 172.72 points, or 0.52%, at 33,474.65, the S&P 500 was up 35.88 points, or 0.86%, at 4,219.84, and the Nasdaq Composite was up 83.68 points, or 0.67%, at 12,572.61.
But the tech-heavy Nasdaq was set for its worst monthly drop in years as investors dumped high-growth stocks in April on fears that rising interest rates will threaten future earnings and Netflix Inc posted a shocking subscriber loss.
Overall, first-quarter earnings have been better than expected, with 81% of the 237 companies in the S&P 500 that have reported results so far beating Wall Street expectations. Typically, only 66% of companies beat estimates, according to Refinitiv data.
Qualcomm Inc rose 6.2% after the chipmaker forecast third-quarter revenue above analyst expectations, while Caterpillar Inc fell 4.7% as it indicated profit margins in the current quarter were likely to be pressured from surging costs.
Among other movers, Amgen Inc fell 5.2% after the drugmaker said the U.S. Internal Revenue Service is seeking additional back taxes of $5.1 billion.
Declining issues outnumbered advancers for a 1.07-to-1 ratio on the NYSE and a 1.71-to-1 ratio on the Nasdaq.
The S&P index recorded three new 52-week highs and 43 new lows, while the Nasdaq recorded 19 new highs and 625 new lows.
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