Stocks open higher on Wall Street as investors cheer earnings reports
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US markets pointed toward a higher open on Thursday as investors waited for hints from central bank leaders about their plans to try to tame four-decade high inflation.
On Wall Street, futures for the Dow Jones Industrials gained 0.7% while S&P 500 futures were 0.8% higher.
Investors will turn their attention to a panel discussion Thursday with US Federal Reserve Chair Jerome Powell and European Central Bank President Christine Lagarde at a meeting of the International Monetary Fund and World Bank.
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Rising prices have prompted the Federal Reserve and other central banks to raise interest rates to temper inflation’s impact. The Fed has already announced a quarter-percentage point rate hike and Wall Street expects a half-percentage rate hike at its next meeting in two weeks.
Markets have been focusing on corporate earnings to see how companies are dealing with rising inflation and cost pressures. Inflation has been pressuring a wide range of industries and increasingly squeezing consumers.
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Shares of Tesla gained more than 7% in overnight after the electric car maker reported Wednesday that its first-quarter net earnings were more than seven times greater than a year ago. The company’s results were powered by strong sales despite global supply chain kinks and pandemic-related production cuts in China. It was also boosted by multiple price hikes meant to offset rising costs of lithium, nickel, cobalt and other raw materials.
The situation in Ukraine remained fraught as Russian President Vladimir Putin tried to claim victory in the strategic port of Mariupol, even as he ordered his troops not to storm the last pocket of Ukrainian resistance in the war’s iconic battleground.
France’s CAC 40 gained 1.7% in midday trading, while Germany’s DAX added 1.5%. Britain’s FTSE 100 rose 0.2%.
Shanghai’s benchmark fell 2.3%, to 3,079.81, after Chinese President Xi Jinping signaled no change in his government’s stringent “zero-COVID” policies despite their growing impact on the slowing economy.
Speaking at a forum of Asian leaders, Xi called for more stringent international efforts to combat coronavirus outbreaks. He also said his government supports talks to resolve international disputes and opposes the use of sanctions.
He did not mention the weeks-long lockdowns in Shanghai and other cities or the costs of that strategy but sought to reassure the world the country is still committed to opening its economy, Stephen Innes of SPI Asset Management said in a commentary.
“China’s markets continue to underperform, weighed down by growth fears and the COVID-zero policy on the mainland, while U.S. delisting fears on dual-listed equities continue to hamstring Hong Kong markets,” Jeffrey Halley of Oanda said in a report.
Japan’s benchmark Nikkei 225 jumped 1.2% to finish at 27,553.06. Australia’s S&P/ASX 200 added 0.3% to 7,592.80. South Korea’s Kospi surged 0.4% to 2,728.21. Hong Kong’s Hang Seng slipped 1.3% to 20,682.22.
New Zealand’s benchmark edged 0.1% lower after the government reported the inflation rate hit a 30-year high of 6.9%, driven by housing and gas.
In energy trading, US benchmark crude added 86 cents to $103.05 a barrel. It rose 0.2% on Wednesday and is now up nearly 40% for the year. Brent crude, the international standard, jumped $1.16 to $107.96 a barrel.
In currency trading, the US dollar rose to 128.13 Japanese yen from 127.89 yen. The euro cost $1.0885, up from $1.0847.
Gold prices slipped 1% to a two-week low on Thursday hit by rising US Treasury yields and as an improvement in risk appetite dented the appeal of the safe-haven metal. Spot gold fell 0.9% to $1,939.12 per ounce by 1145 GMT, after hitting its lowest level since April 8. U.S. gold futures were down 0.6% at $1,943.60 per ounce.
“We are seeing a decent pickup in equity markets in recent days so that is an indication that risk-on attitudes are back into the market and may be detracting a little bit from gold,” said WisdomTree analyst Nitesh Shah.
US stock index futures rose on Thursday as heavyweight Tesla surged on strong results and United Airlines predicted a surprise profit in its current quarter. Investors will be looking forward for fresh policy updates from European Central Bank President Christine Lagarde and Fed chair Jerome Powell at an IMF panel later on Thursday. Benchmark US 10-year Treasury yields edged higher towards a more than three-year peak scaled on Wednesday.
Yields have been marching higher recently on expectations that the Federal Reserve will aggressively hike interest rates as inflation accelerates at its fastest rate in 40 years.
