NEW YORK: US stocks rose on Tuesday even in the face of surging Treasury yields as a positive earnings reports helped investors shrug off potential risks from an aggressive rise in US interest rates and the Ukraine war.
Johnson & Johnson rose 2.8% to a record high as the drugmaker’s quarterly profit exceeded market expectations and it raised the dividend payout.
Halliburton Co gained 1.5% after the oilfield services firm posted an 85% rise in first-quarter adjusted profit, as a rally in crude prices boosted demand for its services and equipment.
Shares of megacap companies like Microsoft Corp, Apple Inc and Amazon.com, typically sensitive to bond yields, jumped more than 1% despite hawkish comments from St. Louis Federal Reserve Bank President James Bullard.
The benchmark 10-year note yield rose to 2.924, while the 30-year US Treasury yield hit 3% for the first time since early 2019.
“The earnings season is taking some of the attention that had been hyperfocused on the correlation between yields and falling growth stocks,” said Art Hogan, chief market strategist at National Securities in New York.
After rebounding in March from a selloff driven by the Ukraine war, 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 has shed about 13.2% so far this year, while its value counterpart is flat.
At 10:18 a.m. ET, 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 nearly a full percentage point, citing Russia’s war in Ukraine and growing inflationary pressures.
Twitter Inc slipped 2% despite overnight reports that more private-equity firms have expressed interest in participating in a deal for the micro-blogging site.
Travelers Companies Inc fell 4% even as the property and casualty insurer posting 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 about 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% have topped profit estimates, as per Refintiv data. Typically, 66% beat estimates.
Advancing issues outnumbered decliners by a 1.85-to-1 ratio on the NYSE and a 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.
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