Stocks rose, with traders awaiting results from Microsoft Corp. and Alphabet Inc. to gauge whether all the enthusiasm around artificial intelligence will justify this year’s advance.
(Bloomberg) — Stocks rose, with traders awaiting results from Microsoft Corp. and Alphabet Inc. to gauge whether all the enthusiasm around artificial intelligence will justify this year’s advance.
With the S&P 500 just 5% away from its all-time high, elevated bullish positioning and indicators pointing to overbought levels, many investors are counting on earnings to make a decision on where to go from here. Roughly 170 companies in the benchmark are set to post their quarterly numbers this week, representing 40% of the total market capitalization.
“We are about to enter the height of earnings season and of the companies that have reported results so far, the majority have reported better-than-expected earnings and revenue, albeit expectations have been low,” said Brad Bernstein, managing director at UBS Wealth Management. “As long as earnings continue to exceed expectations, the market can continue to move higher.”
Bonds came briefly under pressure after data showing an increase in consumer confidence to a two-year high bolstered the soft-landing narrative — while also suggesting policymakers aren’t done with their inflation fight yet.
The S&P 500 rose for a third consecutive session, climbing toward its highest since April 2022. The Nasdaq 100 outperformed, with Microsoft up 1% and Alphabet little changed. The Dow Jones Industrial Average was set for its 12th straight advance — the longest winning run since 2017. Treasury two-year yields dropped three basis points to around 4.9%. The dollar halted a five-day increase.
Corporate Highlights:
- General Electric Co. raised its full-year guidance and reported results that blew past Wall Street’s expectations as the manufacturer capitalizes on rebounding renewable-energy orders and an air travel boom that continues to drive demand for jet engines.
- Verizon Communications Inc. beat analysts’ estimates for profit and subscribers after a surprising turnaround in customer growth.
- General Motors Co. easily beat analyst earnings estimates in the latest quarter and raised 2023 profit projections for the second time this year. But that hasn’t garnered excitement from shareholders.
- 3M Co.’s profit topped estimates in the second quarter, driving a rise in the annual outlook, after sweeping cost cuts fueled better-than-expected earnings and cash flow.
- Sherwin-Williams Co. raised its full-year guidance after a strong second-quarter performance, a sign that consumers are continuing their improvement projects despite higher prices.
- Spotify Technology SA fell after the audio streaming giant reported sales that came up short of analysts’ expectations and issued a forecast that was also light.
- IRobot Corp. dropped after Amazon.com Inc. said it’s paying less to acquire the Roomba maker to account for fresh financing taken out by the company as a merger review drags on.
Some of the main moves in markets:
Stocks
- The S&P 500 rose 0.3% as of 12:15 p.m. New York time
- The Nasdaq 100 rose 0.7%
- The Dow Jones Industrial Average rose 0.2%
- The MSCI World index rose 0.5%
Currencies
- The Bloomberg Dollar Spot Index fell 0.2%
- The euro fell 0.1% to $1.1052
- The British pound rose 0.4% to $1.2875
- The Japanese yen rose 0.4% to 140.90 per dollar
Cryptocurrencies
- Bitcoin rose 0.4% to $29,250.36
- Ether rose 0.6% to $1,861.13
Bonds
- The yield on 10-year Treasuries advanced two basis points to 3.89%
- Germany’s 10-year yield was little changed at 2.43%
- Britain’s 10-year yield advanced one basis point to 4.27%
Commodities
- West Texas Intermediate crude rose 1.1% to $79.62 a barrel
- Gold futures rose 0.2% to $2,005.40 an ounce
This story was produced with the assistance of Bloomberg Automation.
–With assistance from Jason Scott, Tassia Sipahutar, Sujata Rao and Isabelle Lee.
More stories like this are available on bloomberg.com
©2023 Bloomberg L.P.