Wall Street climbs again to tack more onto its big rally for the year
Another tick higher for Wall Street on Wednesday added to its big rally for the year after earnings reports from banks and other big U.S. companies.
The Standard & Poor’s 500 rose 10.74 points, or 0.2%, to 4,565.72. After its seventh gain the last eight days, it’s now up nearly 19% for the year so far and is at its highest level in more than 15 months. The Dow Jones industrial average advanced 109.28 points, or 0.3%, to 35,061.21, and the Nasdaq composite edged up 4.38 points, or less than 0.1%, to 14,358.02.
Elevance Health helped lead the market, climbing 4.4%. The insurance provider reported stronger profit and revenue for the spring than analysts expected, while raising its forecast for earnings over the full year.
Stocks also broadly got a boost from easing pressure from the bond market, where yields fell after a report showed U.K. inflation cooled by more than expected. It eased to 7.9% in June, a 15-month low.
The U.K. data follow encouraging U.S. reports that have raised hope that inflation is moderating enough to persuade the Federal Reserve to soon halt its hikes to interest rates. That could allow the economy to avoid a long-predicted recession.
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The pressure caused by high rates has already helped cause the collapse of several U.S. banks, which saw customers suddenly flee. Other smaller and midsize banks have since been under heavy scrutiny by investors, and they’re beginning to report their results for the spring.
Western Alliance Bancorp bounced from an early loss to a gain of 7.8% after reporting weaker profit for the latest quarter than analysts expected. It also said customers added $3.5 billion in deposits from April through June.
U.S. Bancorp rose 6.5% after reporting weaker profit than expected but slightly stronger revenue. It also said its deposits grew 3.2% from earlier this year. M&T Bank gained 2.5% after reporting stronger profit than expected and higher deposits. Investment bank Goldman Sachs added 1%, after it fell short of profit expectations for the latest quarter but topped forecasts for revenue.
One of Wall Street’s biggest winners was Carvana, which soared 40.2%. The used-car dealer agreed with its lenders to reduce its debt by $1.2 billion. It also reported a milder net loss for the latest quarter than analysts expected.
The earnings reporting season is picking up momentum in its second week, and expectations are broadly low. Analysts are forecasting a third straight quarter of drops in earnings per share for S&P 500 companies, but that low bar also makes it easier for companies to top expectations.
Economists on Tuesday focused on the figure that excludes volatile autos, gas, building materials and food services, which rose a solid 0.6% in June.
Trucking company J.B. Hunt Transport Services reported a drop in earnings per share for the latest quarter that was worse than analysts expected. But its stock nevertheless rose 3.8%. Analysts pointed to the company’s highlighting some encouraging trends, with a possible return to growth appearing closer on the horizon.
On the losing side of Wall Street was Omnicom Group. The marketing and communications company fell 10.4% after it failed to meet analysts’ expectations for revenue growth during the spring.
“Probably the best way to sum up this market at the moment is, ‘can’t stop, won’t stop,’” said JJ Kinahan, chief executive of IG North America.
The S&P 500 has already soared 18.9% so far this year as the economy has managed to power through high interest rates, mostly thanks to a remarkably solid job market. Early in the year, much of the market’s gains came from just a small handful of tech stocks, but the gains have broadened out a bit recently as the economy has held up and inflation has cooled more.
In the commodities market, wheat prices surged after Russia launched drone and missile attacks on crucial port infrastructure in Ukraine, destroying 60,000 tons of grain. The price of soft red winter wheat, traded in Chicago and used for cookies and specialty products, rose 8.5%.
The attacks come days after Russia pulled out of the Black Sea Grain Initiative, which allowed exports from Ukraine to reach many countries facing the threat of hunger.
In stock markets abroad, the FTSE 100 in London jumped 1.8% after the encouraging inflation data there.
Stocks were mixed elsewhere in Europe and across Asia. Hong Kong’s Hang Seng fell 0.3%, partly due to selling of property shares after troubled developer China Evergrande reported its total debt rose in the last two years to about $340 billion.
In the bond market, the yield on the 10-year Treasury slipped to 3.74% from 3.79% late Tuesday. It helps set rates for mortgages and other important loans.
AP writers Matt Ott and Elaine Kurtenbach contributed to this report.
