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Upbeat results from Meta power Nasdaq
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First-quarter GDP lands well below expectations
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Treasury yields rise as debt ceiling debate continues
(Updates to afternoon)
By Stephen Culp
NEW YORK, April 27 (Reuters) - U.S. stocks rallied and
Treasury yields resumed their climb on Thursday as market
participants digested solid earnings amid signs of a dampening
economy.
All three major U.S. stock indexes were sharply higher, with
megacap tech and tech-related companies putting the Nasdaq on
track for its biggest one-day percentage gain since mid-March.
The S&P 500 and the Dow have set a course for their largest
daily percentage gain since early January.
Upbeat quarterly results from Meta Platforms Inc ,
following similarly strong earnings from Microsoft Corp and Alphabet Inc added fuel to the rally.
"The (earnings) beat from Meta was strong," said Jay Hatfield, portfolio manager at InfraCap in New York. "And on the heels of Microsoft and Alphabet (results), the fear that earnings were going to be terrible really isn’t playing out." "Earnings are trumping the concern over another Fed (interest rate) hike," Hatfield added. Economic data released before the bell showed the U.S. economy slowed more than expected in the first quarter, even as price growth came in hotter than economists projected. At the same time, initial claims for unemployment benefits fell, suggesting ongoing tightness in the labor market, a major driver of inflation. "The economic reports continue to show a mixture of decelerating and accelerating trends," said Thomas Martin, Senior Portfolio Manager at GLOBALT in Atlanta. "It’s tough to know how much good news is good news, and vice versa, when it comes to what the Fed has to do." The Dow Jones Industrial Average rose 479.55 points, or 1.44%, to 33,781.42; the S&P 500 gained 72.06 points, or 1.78%, to 4,128.05; and the Nasdaq Composite added 268.95 points, or 2.27%, to 12,123.30. European stocks closed higher, boosted by a raft of upbeat earnings, particularly from Deutsche Bank AG and Barclays Plc . The pan-European STOXX 600 index rose 0.18% and MSCI's gauge of stocks across the globe gained 1.16%. Emerging market stocks rose 0.49%. MSCI's broadest index of Asia-Pacific shares outside Japan closed 0.31% higher, while Japan's Nikkei rose 0.15%. Treasury yields gained ground across the board as investors weighed the looming debt ceiling showdown in Washington and signs that inflation could remain stubbornly high even as the economy slows. Benchmark 10-year notes last fell 25/32 in price to yield 3.5242%, from 3.43% late on Wednesday. The 30-year bond last fell 39/32 in price to yield 3.7579%, from 3.689% late on Wednesday. The greenback edged higher against a basket of world currencies following the weaker-than-expected GDP report, which did little to affect financial markets' bets on another rate hike at the Fed's policy meeting next week. The dollar index rose 0.07%, with the euro down 0.16% to $1.1022. The Japanese yen weakened 0.24% versus the greenback to 134.00 per dollar, while Sterling was last trading at $1.2485, up 0.14% on the day.
Oil prices rose after Wednesday's sell-off after Russia said
OPEC+ sees no need for further output cuts.
U.S. crude rose 0.62% to settle at $74.76 per
barrel, while Brent settled at $78.37 per barrel, up
0.88% on the day.
Gold prices inched lower as the dollar strengthened.
Spot gold dropped 0.1% to $1,988.52 an ounce.
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(Reporting by Stephen Culp, Editing by Nick Zieminski and
Jonathan Oatis)
