Wall St rises as earnings lift outlook
NEW YORK (Reuters) – U.S. stocks ended higher on Thursday, boosted by robust U.S. earnings and forecasts, while data showed the U.S. economy was above its pre-pandemic level.
The U.S. economy grew solidly in the second quarter, putting the level of gross domestic product above its pre-pandemic peak, but the pace of GDP growth was slower than economists had expected.
Among upbeat corporate reports on Thursday, Ford Motor Co jumped as it lifted its profit forecast for the year, while KFC-owner Yum Brands Inc rose after beating expectations for quarterly sales.
Below-forecast GDP levels may be easing some investor concerns that the Federal Reserve’s “easy money policy” may be going away soon, said Peter Tuz, president of Chase Investment Counsel in Charlottesville, Virginia. Investors also saw “some pretty good earnings today.”
Stocks were boosted on Wednesday after the Fed said it was not yet time to start withdrawing its massive monetary stimulus.
Economically sensitive groups including financials, materials and energy led S&P sector gains.
The S&P 500 real estate sector hit a record intraday high. The Fed said there was “very little support” for cutting the $40 billion in monthly purchases of mortgage-backed securities “earlier” than the $80 billion in Treasuries.
Graphic: U.S. stock market’s rising valuation –
Unofficially, the Dow Jones Industrial Average rose 151.49 points, or 0.43%, to 35,082.42, the S&P 500 gained 18.31 points, or 0.42%, to 4,418.95 and the Nasdaq Composite added 15.67 points, or 0.11%, to 14,778.26.
On the down side, Facebook Inc shares fell as the company warned revenue growth would “decelerate significantly” following Apple Inc’s recent update to its iOS operating system that would impact the social media giant’s ability to target ads.
About half of the S&P 500 companies had reported second-quarter earnings as of Thursday morning. Nearly 91% of those companies beat profit estimates, and second-quarter earnings now are expected to have jumped 87.2% from a year ago, according to Refinitiv data.
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