Wall Street gains as tech stocks rise; focus shifts to earnings
Hello, Everyone!!! US stocks posted modest gains in early afternoon trading on Thursday as technology stocks rose, while investors shifted their attention to second-quarter earnings.
A rise in shares of Apple, Microsoft and Alphabet provided the biggest boost to the S&P and the Nasdaq.
Yellen's testimony
Global equity markets rallied after Federal Reserve Chair Janet Yellen had signalled a more gradual tightening of monetary policy than expected on Wednesday.
The US economy is healthy enough for the Fed to raise rates and begin winding down its massive bond portfolio, though low inflation and a low neutral rate may leave the central bank with diminished leeway, Yellen said.
Yellen wrapped up her two-day testimony before Congress on Thursday and said it would be “quite challenging” for the US to reach the three per cent growth target set by President Donald Trump.
“Yesterday's move was in response to Yellen comments that should inflation remain below the 2 per cent target rate, the central bank will be less aggressive in their tightening program,” said Sam Stovall, chief investment strategist at CFRA Research.
“Today, the market is saying that's old news and let's focus on the matter at hand, which is earnings that will be coming out in earnest this week.”
Corporate earnings
Quarterly earnings will kick off on Friday with big US banks, including JPMorgan Chase, Wells Fargo and Citigroup, reporting results.
The financial index was the second-largest gainer among the 11 major S&P sectors, rising 0.47 per cent.
Second quarter earnings are expected to increase 7.8 per cent from a year ago, after first-quarter earnings posted their best performance since 2011, according to Thomson Reuters I/B/E/S.
At 12:48 p.m. ET (1648 GMT), the Dow Jones Industrial Average was up 26.5 points, or 0.12 per cent, at 21,558.64, the S&P 500 was up 4.84 points, or 0.19 per cent, at 2,448.09. The Nasdaq Composite was up 13.26 points, or 0.21 per cent, at 6,274.43.
Producer prices
Data showed US producer prices unexpectedly rose in June. In the 12 months through June the producer level inflation, or PPI, increased 2.0 percent, above the 1.9 per cent rise expected.
Another set of data showed weekly jobless claims fell last week for the first time in a month.
Among stocks, Target rose 4.5 per cent after the retailer gave an upbeat second-quarter forecast. The news boosted other retailers, with Wal-Mart up 1.4 per cent and Costco edging up 0.8 per cent.
Declining issues outnumbered advancers on the NYSE by 1,462 to 1,364. On the Nasdaq, 1,721 issues fell and 1,046 advanced.