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A choppy day on Wall Street ended with more gains for stocks Wednesday, as investors welcomed another batch of encouraging profit reports from U.S. companies.
The Standard & Poor's 500 rose 0.6%, tacking more onto its big gains from a day earlier, when the benchmark index soared 2.8%, its best day in weeks.
The Dow Jones industrial average managed a modest 0.2% gain after recovering from a midafternoon pullback. The Nasdaq composite climbed 1.6%.
With the latest move higher, the major indexes are on pace for solid weekly gains.
“It’s not exactly the most robust day, but it’s nice to follow up on a day like yesterday,” said Ross Mayfield, investment strategist at Baird. “It feels like over the past couple of months good days have given it all back the very next day.”
Profit reporting season is ramping up, with more types of industries offering details about how high inflation and worries about a possible recession are affecting their customers. A lot is riding on whether they can continue to deliver healthy earnings.
Stocks tumbled roughly 20% from their highs this year because of 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 downward spiral.
For now, traders appear to be encouraged by what they’re hearing from companies, especially big banks.
“It wasn’t universal, but the broad takeaway from the big banks earlier is the consumer is doing all right. The data has confirmed that,” Mayfield said.
Companies have been mostly topping profit expectations so far this reporting season, as is usually the case, though the most recent reports were mixed.
Nasdaq, the company behind its namesake trading exchange, jumped 6.1% after delivering stronger profit and revenue than Wall Street expected. Omnicom Group, the advertising and public-relations company, rose 3.9% after better-than-expected earnings. Comerica, the Dallas financial services company, added 1.6% after it also reported stronger-than-expected results.
Netflix climbed 7.4% after it said it lost fewer subscribers during the spring than expected. But it remains the worst stock in the S&P 500 for the year, down by nearly two-thirds.
Beyond Netflix, several other tech-oriented companies made strong gains. Amazon climbed 3.9%, and Nvidia jumped 4.8%, which helped boost the tech-heavy Nasdaq.
On the losing end was Baker Hughes, which tumbled 8.3% after it reported weaker results for the spring than analysts expected. Northern Trust fell 4% after its profit fell short of forecasts.