December 5, 2022

Stocks advanced Wednesday as investors considered another batch of solid quarterly corporate earnings results and looked ahead to more reports.

The S&P 500 extended gains from the regular trading session on Tuesday. The Nasdaq outperformed, with technology shares climbing as Treasury yields paused after a recent run-up. The benchmark 10-year yield eased back from its highest level since November 2019.

Chipotle Mexican Grill’s (CMG) stock rose after the fast-casual restaurant chain posted a quarterly earnings beat and saw margins expand despite concerns over food price inflation and labor costs. Shares of Lyft (LYFT) turned positive to shake off earlier losses after the company forecasted first-quarter revenue that missed expectations, as the Omicron wave weighed on ridership at the start of the new year.

But an otherwise strong set of earnings results has helped underpin stocks in recent weeks, with the S&P 500 pacing toward a third straight weekly gain. Aggregate S&P 500 earnings per share (EPS) are currently exceeding consensus expectations by 6% so far for the latest quarter, according to Bank of America’s update Tuesday. S&P 500 earnings are tracking toward a growth rate of well over 20% on a year-over-year basis.

“Right now what people are looking for in the markets is earnings, because we know moving through 2022 that earnings are going to come under pressure as margins contract and as the economy slows down. It’s why we’re concerned about things like rising interest rates, … elevated inflation prints, [and] a policy misstep this year,” Jack Manley, JPMorgan Asset Management global market strategist, told Yahoo Finance Live on Tuesday. “The what we’re going to be able to avoid any of those potential pitfalls is through earnings.”

Still, those concerns around inflation and the Federal Reserve’s next monetary policy moves remain key areas of uncertainty for investors. And new data on these fronts is due later this week, with the January Consumer Price Index (CPI) expected to show a fresh 39-year high rate of inflation.

“I don’t think I would say that we are 100% in the clear and that we’re on this strong rebound,” Victoria Fernandez, Crossmark Global Investments chief market strategist, told Yahoo Finance on Tuesday. “There’s just too much volatility going on, and I think you’re going to continue to see that.”

“You have a market that’s trying to digest so many elements: You’ve got a decently strong economy, but you’ve got these inflation concerns, … you’ve got valuations that have been somewhat stretched, you have questions as to what monetary policy is going to look like over the course of 2022,” she added. “I would be careful going all in thinking this is a rebound that won’t come back some.”

4:03 p.m. ET: Technology stocks lift indexes as earnings roll in: Nasdaq gains 2.1%, S&P 500 rises 1.5%

Here were the main moves in markets as of 4:03 p.m. ET:

  • S&P 500 (^GSPC): +65.67 (+1.45%) to 4,587.21

  • Dow (^DJI): +305.68 (+0.86%) to 35,768.46

  • Nasdaq (^IXIC): +295.92 (+2.08%) to 14,490.37

  • Crude (CL=F): +$0.60 (+0.67%) to $89.96 a barrel

  • Gold (GC=F): +$5.70 (+0.31%) to $1,833.60 per ounce

  • 10-year Treasury (^TNX): -2.5 bps to yield 1.9290%

2:51 p.m. ET: Meta Platforms shares end four-day losing streak as broad tech rally lifts stock

Shares of Meta Platforms (FB) were on track to rise for the first time in five days, with the stock appearing to find a bottom after sinking by 32% in total over the prior four sessions.

The decline in Meta Platforms shares came after the company offered a disappointing forecast for the current quarter, saying sales would likely come in between $27-$29 billion. This fell short of the $30.25 billion consensus analysts were expecting, according to Bloomberg data. Daily and monthly active users for Facebook also came in light for the fourth quarter. The company blamed the results on increased competition from other social media players like TikTok and Snap, and also cited increased difficulties in tracking ad performance due to an Apple iOS privacy change.

10:55 a.m. ET: Wholesale inventories revised up for December amid shortages

U.S. wholesale inventories were revised up in December to reflect a larger month-over-month increase than previously reported, as companies worked to replenish depleted inventories amid supply chain challenges.

Wholesale inventories rose 2.2% in December compared to November, coming in above the 2.1% rise previously reported for the month, the Commerce Department said Wednesday. Inventories serve as an input to gross domestic product (GDP). U.S. GDP was reported as having risen at a 6.9% annualized rate in the fourth quarter of 2021, according to the first estimate released in late January.

9:30 a.m. ET: Stocks open sharply higher, led by tech

Here’s where stocks were trading just after the opening bell:

  • S&P 500 (^GSPC): +41.16 (+0.91%) to 4,562.70

  • Dow (^DJI): +236.65 (+0.67%) to 35,699.43

  • Nasdaq (^IXIC): +165.40 (+1.17%) to 14,360.43

  • Crude (CL=F): +$0.32 (+0.36%) to $89.68 a barrel

  • Gold (GC=F): +$0.20 (+0.01%) to $1,828.10 per ounce

  • 10-year Treasury (^TNX): -2.2 bps to yield 1.934%

7:49 a.m. ET: Mortgage applications sank by 8.1% last week as rates rose

Mortgage application volume dropped last week to reverse gains from the prior period, as rising rates deterred purchases and refinances.

The Mortgage Bankers Association’s weekly mortgage market composite index dropped by 8.1% during the week ended Feb. 4, following a rise of 12.0% during the previous week. Refinances fell 7% on a week-over-week basis, and more than halved compared to the comparable week a year ago. Purchases also dipped 10% on a week-over-week basis, seasonally adjusted. Unadjusted, purchases were down 12% versus the same period last year.

“Mortgage rates continued to edge higher last week, with the 30-year fixed rate climbing to 3.83%. Rates followed the U.S. 10-year yield and other sovereign bonds as the Federal Reserve and other key global central banks responded to growing inflationary pressures and signaled that they will start to remove accommodative policies,” Joel Kan, associate vice president of economic and industry forecasting, said in. a press statement Wednesday.

“With rates 87 basis points higher than the same week a year ago, refinance applications continued to decrease,” Kan added. “Purchase activity slowed after the previous week’s gain.”

7:33 a.m. ET Wednesday: Stock futures extend gains, led by tech

Here were the main moves in markets as of Wednesday morning:

  • S&P 500 futures (ES=F): +38.75 points (+0.86%), to 4,551.25

  • Dow futures (YM=F): +220 points (+0.62%), to 35,562.00

  • Nasdaq futures (NQ=F): +179.50 points (+1.22%) to 14,914.00

  • Crude (CL=F): -$0.35 (-0.39%) to $89.01 a barrel

  • Gold (GC=F): +$0.30 (+0.02%) to $1,828.20 per ounce

  • 10-year Treasury (^TNX): -2.9 bps to yield 1.929%

6:10 p.m. ET: Tuesday: Stock futures rise

Here’s where markets were trading as the overnight session began on Tuesday:

  • S&P 500 futures (ES=F): +6.75 points (+0.15%), to 4,519.25

  • Dow futures (YM=F): +51 points (+0.14%), to 35,393.00

  • Nasdaq futures (NQ=F): +12.25 points (+0.08%) to 14,746.75

NEW YORK, NEW YORK – FEBRUARY 04: Traders work on the floor of the New York Stock Exchange (NYSE) on February 04, 2022 in New York City. Following a strong jobs report, stocks still slid in morning trading with the Dow Jones Industrial Average down over 60 points as volatility in tech markets unsettled investors. (Photo by Spencer Platt/Getty Images)

Emily McCormick is a reporter for Yahoo Finance. Follow her on Twitter

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