US stocks rose on Tuesday, even as Treasury yields edged up as positive earnings reports helped investors hedge against an aggressive rise in US interest rates and potential risks from the Ukraine war.
Johnson & Johnson rose 2.8% to a record high as the drugmaker’s quarterly profit exceeded market expectations and it raised dividend payments.
Halliburton Co. gained 1.5% after the oilfield services firm posted an 85% increase in first-quarter adjusted profit, as a rally in crude oil prices boosted demand for its services and equipment.
Shares of megacap companies such as Microsoft Corp, Apple Inc and Amazon.com, which are generally sensitive to bond yields, jumped more than 1% despite sharp comments from St. Louis Federal Reserve Bank Chairman James Bullard.
The benchmark 10-year note yield rose to 2.924, while the 30-year US Treasury yield touched 3% for the first time since the start of 2019.
“Earnings season is getting some attention that hyperfocused on the correlation between yields and falling growth stocks,” said Art Hogan, chief market strategist at National Securities in New York.
After withdrawing from the Ukraine war-induced selloff in March, US stocks have come under pressure again this month as the prospect of higher US rates weighed on growth and technology stocks.
The S&P 500 Growth Index is down about 13.2% so far this year, while its value counterpart is flat.
At 10:18 am, the Dow Jones Industrial Average was up 306.62 points, or 0.89%, at 34,718.31, the S&P 500 was up 42.77 points, or 0.97%, at 4,434.46, and the Nasdaq Composite was up 168.88 points, or 1.27. %, at 13,501.24.
The International Monetary Fund cut its forecast for global economic growth by almost a full percentage point, citing Russia’s war in Ukraine and rising inflationary pressures.
Twitter Inc. slipped 2% overnight despite reports that more private-equity firms have expressed interest in participating in a deal for the micro-blogging site.
Travelers Company Inc. fell 4%, even as the property and casualty insurer posted a better-than-expected quarterly profit.
Netflix Inc., set to report after the closing bell, gained 2.5%. The streaming giant is expected to report its slowest quarterly revenue growth in nearly eight years, with analysts warning it could lose nearly a million subscribers due to its exit from Russia.
Of the 49 companies in the S&P 500 index that have reported first-quarter earnings so far, 79.6% topped profit estimates, according to Refinitive data. Generally, 66% beat the estimates.
Further downside was the 1.85-to-1 ratio on the NYSE and 2.52-to-1 ratio on the Nasdaq.
The S&P index recorded 27 new 52-week highs and 11 new lows, while the Nasdaq recorded 45 new highs and 326 new lows. (Reporting by Shruti Shankar in Bengaluru; Editing by Anil D’Silva and Arun Koyur)
This story has been published without modification in text from a wire agency feed. Only the title has been changed.