(Bloomberg) — A renewed rally in some of the world's biggest technology companies supported the U.S. stock market, with traders weighing another big chunk of corporate earnings.
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Shares edged higher, with Tesla Inc. leading gains in megacaps as CEO Elon Musk promised to launch cheaper vehicles. Chipmakers were also prompted by a bullish forecast from Texas Instruments Inc. Later on Wednesday, Meta Platforms Inc. report results, and Wall Street will be focused on whether the social media giant will show signs of a return on its big spending on artificial intelligence.
“Equities have regained a steadier footing after three consecutive weeks of decline,” said Solita Marcelli at UBS Global Wealth Management. “A strong earnings season looks set to help restore market confidence.”
An indicator from JPMorgan Chase & Co.'s trading desk that tracks stock allocations hit a threshold typically followed by gains. The US Tactical Positioning Monitor triggered level showing an “attractive set-up” for the S&P 500, according to Andrew Tyler. The stock benchmark rose about 3% in the subsequent 20 days after the indicator reached a similar level.
The S&P 500 hovered near 5,080, up for a third straight day. The Philadelphia Stock Exchange Semiconductor Index rose 2 percent. Treasury 10-year yields rose six basis points to 4.66% – ahead of a record $70 billion sale of five-year bonds.
The yen weakened above 155 per dollar for the first time in more than three decades, raising the risk that the key level could prompt Japan to step into the market. Oil fell even as traders kept a watchful eye on geopolitical risks after Israel said it hit about 40 sites linked to Hezbollah in southern Lebanon.
“If you take a look at what we've seen over the first quarter, the returns for the S&P are pretty much in line with the earnings growth,” Franklin Templeton's Katrina Dudley told Bloomberg Television. “We believe that the valuations are reasonable. Therefore, we need to continue to deliver on earnings growth for the S&P to perform as we go through the rest of the year.
Interest rates staying high longer, along with economic uncertainty and geopolitical turmoil, have diminished the appeal of some of the stock market's cheapest strategies.
Investors this month have pulled about $200 million out of value-based exchange-traded funds, according to data compiled by Bloomberg Intelligence. In contrast, growth stocks have attracted more than $3 billion in inflows — despite a shaky stock market that has fueled concerns of more downside to come. The diminished interest in cheap stocks comes on the heels of lackluster performance of mainstream value products.
Company highlights:
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Boeing Co. burned through $3.93 billion in cash in the first quarter, a less dramatic drain than analysts had predicted, as the embattled planemaker continues to slow production to address its manufacturing woes.
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B. Riley Financial Inc.'s auditors signed off on their annual report while highlighting concerns about weak internal controls.
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Amazon.com Inc. and Microsoft Corp.'s investments in artificial intelligence startups will face deeper scrutiny from Britain's antitrust watchdog, the latest example of how global regulators are grappling with how the world's biggest tech companies influence the booming market.
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AT&T Inc. beat analysts' estimates for first-quarter profit as it added more mobile phone customers than expected.
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Biogen Inc. reported a first-quarter profit that beat Wall Street expectations as the biotech giant's new Alzheimer's drug Leqembi gained traction and cost-cutting took hold.
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Visa Inc. reported a quarterly profit that beat Wall Street forecasts as U.S. credit card spending rose.
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Humana Inc. pulled its guidance for next year amid mounting pressure in its Medicare business.
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Hasbro Inc. reported first-quarter earnings that beat estimates, a promising sign of the company's turnaround efforts.
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Mattel Inc. reported a smaller-than-expected loss in the first quarter, benefiting from brisk sales of its Hot Wheels model cars and lower costs.
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Citigroup Inc. turned bearish on Molson Coors Beverage Co., expecting sales trends to weaken as benefits from last year's Bud Light boycott fade.
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Solar manufacturers are asking the US government to slap tariffs on $12.5 billion of imported equipment from Southeast Asia, setting the stage for a sweeping trade probe that threatens to make energy projects more expensive.
Key events this week:
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US GDP, wholesale inventories, initial jobless claims, Thursday
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Microsoft, Alphabet, Airbus earnings, Thursday
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Japan interest rate decision, Tokyo CPI, inflation and GDP forecasts, Friday
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US Personal Income and Spending, PCE Deflator, University of Michigan Consumer Sentiment, Friday
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Exxon Mobil, Chevron earnings, Friday
Some of the most important movements in markets:
Equities
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The S&P 500 rose 0.1% as of 10:20 New York time
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The Nasdaq 100 rose 0.7 per cent.
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The Dow Jones Industrial Average fell 0.1 percent.
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The Stoxx Europe 600 fell 0.3 per cent.
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The MSCI World index rose 0.3 per cent.
Currencies
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The Bloomberg Dollar Spot Index was little changed
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The euro was little changed at $1.0699
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The British pound was little changed at $1.2445
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The Japanese yen was little changed at 154.97 per dollar
Cryptocurrencies
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Bitcoin fell 0.5% to $65,997.88
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Ether rose 1% to $3,241.14
Bonds
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The yield on 10-year government bonds rose six basis points to 4.66%
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Germany's 10-year yield rose nine basis points to 2.59%
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UK 10-year yields rose nine basis points to 4.34%
Raw materials
This story was produced with assistance from Bloomberg Automation.
–With assistance from Alexandra Semenova and Carly Wanna.
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