Wall Street’s main indexes rose on Thursday as a slew of strong earnings updates from companies including Meta Platforms, Eli Lilly and Comcast outweighed data showing the U.S. economy slowed more than anticipated in the first quarter.
Meta Platforms Inc soared 15.2% after it forecast quarterly revenue above estimate, and as CEO Mark Zuckerberg said AI was increasing traffic to Facebook and Instagram and boosting ad sales.
The S&P 500 communication services index rallied 4.6% to lead sectoral gains, while shares of social media platforms Snap Inc and Pinterest Inc rose around 2% each.
Eli Lilly and Co advanced 2.3% on raising its full-year profit forecast, while Comcast Corp rose 5.8% as it beat estimates for quarterly revenue and profit, thanks to sustained demand for its broadband services and higher theme park attendance.
Denting sentiment, data showed U.S. economic growth slowed more than expected in the first quarter as an acceleration in consumer spending was offset by businesses cutting back on inventory investment.
“January was really the standout month and since then we’ve seen weakness in February and March, which has really been slowly dragging down the economy,” said Brian Klimke, investment director at Cetera Investment Management.
“If we’re looking to the future, data does seem to be continuing to weaken. The good news is we do think a recession could be mild.”
Despite the slowdown, which mostly reflected a drag from weak inventory investment, the Federal Reserve is expected to raise interest rates by another 25 basis points next week.
A separate report showed initial claims for state unemployment benefits decreased 16,000 to a seasonally adjusted 230,000 for the week ending April 22. Economists had expected 248,000 claims.
Treasury yields moved higher across the board as investors weighed a showdown over the U.S. debt ceiling with economic data suggesting inflation could remain sticky despite a slowing economy.
The decline in first-quarter earnings is estimated to be smaller than analysts had expected at the start of the month, with a host of tech companies including Microsoft Corp and Alphabet reporting upbeat results this week.
Analysts expect first-quarter earnings to drop 3.2% year-over-year for S&P 500 companies versus a 5.1% decline forecast earlier.
Amazon.com Inc and Intel are among the big names set to report after the bell.
The S&P 500 closed at near one-month low on Wednesday as lingering concerns about a weakening U.S. economy were exacerbated by a fresh plunge in First Republic Bank’s shares after a report said the U.S. government was unwilling to engineer its rescue.
At 10:19 a.m. ET, the Dow Jones Industrial Average was up 240.14 points, or 0.72%, at 33,542.01, the S&P 500 was up 38.34 points, or 0.95%, at 4,094.33, and the Nasdaq Composite was up 155.77 points, or 1.31%, at 12,010.12.
The U.S. House of Representatives on Wednesday narrowly passed a bill to raise the government’s $31.4 trillion debt ceiling that includes sweeping spending cuts over the next decade. The bill is expected to get stalled in the Senate.
EBay Inc climbed 3.9% after the e-commerce company forecast current-quarter revenue above projections.
Advancing issues outnumbered decliners by a 2.67-to-1 ratio on the NYSE and a 1.59-to-1 ratio on the Nasdaq.
The S&P index recorded 10 new 52-week highs and three new lows, while the Nasdaq recorded 23 new highs and 103 new lows.
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