July 21 (Reuters) – The Nasdaq edged higher on Thursday, helped by better-than-expected quarterly results from electric car maker Tesla, which helped offset losses in telecom and energy stocks Impact.
The S&P 500 rose 0.6% after earlier losses, while the Dow Jones Industrial Average was flat in early afternoon.
Tesla (TSLA.O) rose 10.1 percent, while AT&T Inc (TN) tumbled after the wireless carrier cut its cash flow forecast, saying some customers were delaying paying bills. Energy stocks slid on weaker crude prices.read more
Tesla’s profits were helped by higher prices for its cars, offsetting production challenges. A strong report from automaker and streaming giant Netflix Inc (NFLX.O) boosted large growth stocks pressured by rising interest rates.
J. Bryant Evans, an investment advisor and portfolio manager at Cozad Asset Management, said: “The earnings picture is probably a little bit better than investors feared. We investors think … technology[industry]in particular has fallen too far, and maybe there is some valuation there. Take the chance.”
Seven of the S&P 500’s 11 major sectors were in positive territory, with consumer discretionary (.SPLRCD), health care (.SPXHC) and information technology (.SPLRCT) the biggest gainers, each rising more than 1%.
Falling oil prices hit the S&P 500 energy sector (.SPNY), which led losses with a 2.8% drop.
All eyes are on next week’s Fed meeting, where policymakers are expected to raise rates by 75 basis points.
Rising inflation also led the European Central Bank to be slow to join its global peers’ rate hike cycle, raising rates by a massive 50 basis points.read more
Next week’s Fed rate decision will be followed by key U.S. second-quarter gross domestic product data, which is likely to be negative again.
As a general rule of thumb, two quarters of negative GDP growth would mean a recession in the U.S.read more
In the latest sign of a slowdown in the U.S. economy, the number of Americans filing for unemployment benefits rose to an eight-month high, while a closely watched gauge of factory activity slipped this month.read more
“Consumers are just starting to respond to less money in their pockets, whether it’s a reduction in the overall job market or higher interest rates and inflation,” Evans added.
“The strong earnings partly reflect the strength of consumers in the past, and a lot of this broader downturn that we’ve seen over the past few months has already reflected a broader economic slowdown that will ultimately impact consumers.”
At 2:24 p.m. ET, the Dow Jones Industrial Average (.DJI) rose 25.94 points, or 0.08%, to 31,900.78, the S&P 500 (.SPX) rose 24.59 points, or 0.62%, to 3,984.49, and the Nasdaq Composite The index (.IXIC ) added 127.19 points, or 1.07%, to 12,024.84.
Advancing issues outnumbered advancing ones on the NYSE by a 1.15-to-1 ratio; on Nasdaq, a 1.20-to-1 ratio favored advancers.
The S&P 500 posted 1 new 52-week high and 29 new lows; the Nasdaq Composite posted 17 new highs and 38 new lows.
Reporting by Echo Wang in New York; Additional reporting by Shreyashi Sanyal and Aniruddha Ghosh in Bengaluru; Editing by Arun Koyyur and Aurora Ellis
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